(as at November 2023)

The acquisition of a company (company succession) as well as the lease of a company presents buyers and sellers as well as lessees and lessors with numerous legal issues that need to be considered. In addition to economic and tax issues, legal questions may arise, for example, in tenancy law (§ 12a MRG), trade law and many more. The following explanations provide a rough overview of some of the regulations on legal liability in the case of company acquisitions.

ABGB: Under Section 1409 ABGB, the acquirer of the company joins the seller in incurring debts, whereby the debts belonging to the company that the acquirer knew or should have known about at the time of transfer are taken into account. This is intended to provide the creditors with an additional liability fund. The amount of the possible liability of the company acquirer is limited to the so-called pro-viribus liability, which amounts to the market value of the acquired assets. The liability is mandatory, but is reduced by debt repayments by the acquirer. Section 1409 ABGB has a different effect in the case of lease agreements. This is because, in connection with Section 1409, a lease does not result in a takeover of assets or a company and excludes the lessor’s liability for the lessee’s debts after the leased property has been returned to the lessor.

UGB: Section 38 of the Austrian Commercial Code (UGB) is of particular importance, which, in comparison to Section 1409 of the Austrian Civil Code (ABGB), does not standardize a limitation of liability of the company acquirer in terms of amount, but can be waived by certain announcements. The subsequent liability period of the seller is limited to a maximum of eight years. The UGB also differentiates between company acquisitions and company leases, as the continuation of the company by way of a lease is not considered an acquisition within the meaning of Section 38 UGB.

BAO: With a focus on tax law and the associated liability provisions for company acquisitions and leases, Section 14 BAO should be emphasized. According to § 14 BAO, the acquirer is only liable for taxes and tax deductions if he knew or should have known of the debts and only up to the value of the transferred assets and rights without deduction of assumed debts. As a rule, the lease is not yet to be regarded as a cessation of the business, especially if the lease is only for one year and the lessor continues to work in the business as a consultant to the lessee and receives a fee for this. An option right to acquire the business granted to the lessee at the same time, even if it is exercised before the lease expires, does not go back to the beginning of the lease (VwGH 0974/67 of 02.02.1968). The lessee does not become the economic owner of the leased business merely by leasing it (cf. also the relevant decision of November 17, 2004, no. 2000/14/0142, and Ritz, BAO3, no. 9 to § 24, and Stoll, BAO Volume 1). The leasing of the business by the lessor is not a transfer of ownership (see also Ritz, BAO3, Tz 8 zu § 14 and Stoll, BAO Band 1, 165). Only the Vienna Amusement Tax Act and the Beverage Tax Act as well as the Sports Promotion Contribution Act also apply to the lessee.

ASVG: Section 67 (4) ASVG is relevant in the General Social Insurance Act. Here, the acquirer of a business is liable for contributions that his predecessor would have had to pay, irrespective of the continuing liability of the predecessor, for a maximum period of twelve months from the date of acquisition. If the acquirer makes enquiries with the insurer regarding the outstanding amounts, he is only liable for the amount that has been shown to be in arrears.

If the business is transferred to a relative of the predecessor in business, a person with a significant interest in the predecessor’s business or a person with significant influence on the management of the predecessor in business (e.g. managing director, senior employee, authorized signatory), this successor in business is liable like a purchaser regardless of the legal transaction on which the transfer of business is based, unless he proves that he was not aware of the contribution debts or could not have been aware of them despite his position in the predecessor’s business. The aforementioned participation is aimed at more than a quarter of the working capital.

It should be noted that § 67 para. 4 does not apply to the mere corporate lessee. (Teschner/Pöltner (eds.), Allgemeine Sozialversicherung, Loseblattsammlung (2017) § 67 Rz 2).

AVRAG: The acquisition or lease of a company is usually accompanied by the transfer of existing employment relationships. In this context, the AVRAG contains the following provision in § 3 AVRAG: If a company, business or part of a business is transferred to another owner (transfer of business), the new owner (necessarily) becomes the employer with all rights and obligations in the employment relationships existing at the time of the transfer. In the case of a lease, there is also a transfer of business and in the case of a company lease, all employees are taken over.

For further questions and individual advice, please contact us at any time on 01/505 77 00 (or by e-mail at office@toplaw.at).