A continuation clause should clarify what happens when an OG shareholder gives notice. The key issues are the departure date, compensation, liability and Companies Register filing.
When a shareholder gives notice to an Austrian general partnership, the offene Gesellschaft or OG, continuation with the other shareholders is reliable only if the articles clearly allocate the consequences. Section 131(6) UGB initially treats notice as a ground for dissolution. A continuation clause must therefore state clearly whether the departing shareholder leaves the OG and the remaining shareholders continue the business.
Four dates must be kept separate: receipt of the notice, the departure date, the settlement of the partnership assets and the Companies Register entry. These dates affect compensation, pending transactions and liability towards creditors.
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Section 131(6) UGB lists notice as a ground on which an OG is dissolved. The statutory starting point must be addressed in the agreement. Section 108 UGB also provides that the relationship between the shareholders is governed by the articles unless mandatory special rules apply.
A continuation clause therefore needs a clear consequence. It should state that notice by one shareholder, following the agreed procedure, results in that shareholder’s departure and that the remaining shareholders continue the OG. A general intention to continue leaves open whether the OG has actually continued or has first entered liquidation. The distinction from continuing a GmbH after a dissolution resolution matters because a different legal form is governed by different rules.
If the OG was formed for an indefinite period, section 132(1) UGB generally allows notice only at the end of a financial year. The notice must be given at least six months before that date. Under section 132(2) UGB, an agreement may not exclude the right to give notice or make it more difficult than by a reasonable extension of the notice period.
The receipt of the notice, the end of the period and the contractual departure date should be documented. The date controls the asset settlement and the allocation of pending matters. If the agreement uses different dates for notice, settlement and filing, it should link them expressly.
The clause should identify the remaining shareholders, continuation under the existing firm name, the departure date and responsibility for the settlement. It should also address what happens if the minimum number of shareholders or the required representation is no longer available. Vague wording can move the dispute from the will to continue to the question whether dissolution or continuation occurred.
The consequences for management, representation, bank authorities and current contracts should be coordinated as well. The agreement should not promise an automatic release from liability towards third parties. Any later amendment must also address resolution, form and Companies Register requirements, as illustrated from another legal-form perspective by the guidance on amending GmbH articles.
Under section 137(2) UGB, the departing shareholder must be paid in money what they would have received if the OG had been dissolved at the time of departure. The value of the partnership assets must be estimated where necessary. The agreement may structure valuation through a date, method and process for disagreement. A reliable figure cannot be stated without the agreement, the assets, the debts and the valuation material.
Items that the shareholder made available for use by the OG must be returned under section 137(1) UGB. Under section 137(3) UGB, the departing shareholder is to be released from partnership debts for which they remain liable to creditors. If a debt is not yet due, the OG may provide security instead. Balances owed by or to the shareholder belong in the same settlement.
Under section 138(1) UGB, the departing shareholder participates in profit and loss from transactions that were still pending when they left. The OG may complete those transactions in the way most advantageous to it. The economic connection with an existing transaction therefore does not end automatically on the departure date.
At the end of each financial year, the departing shareholder may request an account of transactions completed in the meantime, payment of the amount due and information about transactions still pending. A list showing contracting party, performance status, expected revenue and costs makes the settlement traceable. It should remain separate from general profit allocation in the continuing OG.
Under section 128 UGB, OG shareholders are jointly and without limitation liable to the partnership creditors. An internal resolution by the remaining shareholders does not end this external liability. Section 160 UGB limits liability for debts established before departure only under its stated conditions and periods.
Under section 160(2) UGB, the relevant period begins at the end of the day on which the departure is entered in the Companies Register. The OG should therefore document the actual date, the entry and outstanding creditor claims together. An internal arrangement can organise the relationship between the shareholders, but it does not automatically remove creditors’ rights.
Under section 143(2) UGB, the departure of a shareholder must be filed for entry in the Companies Register. The filing must reflect the actual partnership position. Section 106 UGB requires the OG to be registered with the competent court, and section 107 UGB generally requires all shareholders to participate in the filing.
Before filing, compare the articles, notice or departure agreement, representation rules, firm name and intended entry. If the notice leads to continuation with the remaining shareholders, the filing should not present a contradictory dissolution or liquidation status. The entry does not replace the compensation and creditor-liability review.
The first review file should contain the current articles and amendments, notice or departure agreement, minutes, Companies Register extract, authorities, bank documents and a shareholding overview. Add the asset position, receivables, partnership debts, security and pending transactions with their contract details.
The sequence should be: read the clause and notice right, determine the date, record compensation and pending transactions, align liability and filing, and only then change operational access and bank authorities. Anyone wishing to receive updates on company-law developments can subscribe to BRANDaktuellen Rechtsnews.
Section 131(6) UGB lists notice as a ground for dissolution. Whether a valid continuation clause instead links the notice to the departing shareholder’s exit must be assessed from the specific articles.
Under section 132(1) UGB, notice can generally be given at the end of a financial year and at least six months beforehand. Section 132(2) UGB limits contractual restrictions on that right.
Section 137(2) UGB refers to what the shareholder would have received if the OG had been dissolved at the time of departure. The agreement, assets, debts and any required valuation determine the result.
External liability for existing partnership debts does not end automatically through an internal resolution. Section 160 UGB provides a limitation under specified conditions, with the Companies Register entry relevant to the period.
The departure must be filed under section 143(2) UGB. The filing should show the actual departure date, continuing representation and correct status of the OG.
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