Retained company money: interest under section 1183 ABGB

Section 1183 ABGB imposes an interest duty for three internal money obligations of an Austrian civil-law partnership (GesbR). It covers a late payment of the shareholder’s cash contribution, a late transfer of money received for the partnership to its assets and an unauthorised withdrawal from those assets.

Interest starts on the day the payment or transfer should have been made, or on the day the money was withdrawn. Each money movement therefore needs its own date and supporting record.

The provision addresses these specific money movements. It does not answer every question about payments between shareholders and it does not replace the distinction between profit distribution, an authorised withdrawal and another legal form.

Three money duties lead to interest under section 1183 ABGB

Section 1183(1) ABGB names three separate cases. A shareholder pays a cash contribution late, fails to transfer money received for the partnership to its assets in time or withdraws money from those assets without authority. Each case has its own trigger.

For the contribution, the due payment date matters. For received company money, the relevant date is when the transfer should have been made. For a withdrawal, interest starts on the day of the withdrawal. The three dates must remain separate in the account.

The provision is not a general interest rule for every outstanding item. A profit distribution, an authorised private withdrawal and another monetary claim require their own classification. The legal form also matters: this article addresses internal money duties of a GesbR.

Late cash contribution: identifying the due date

A shareholder who does not pay a cash contribution in time falls within the first case in section 1183(1) ABGB. Interest is linked to the day on which the payment should have been made. The actual payment date shows when the delay ended, but it does not establish the due date by itself.

The due date may appear in the partnership agreement, a supplementary arrangement, a resolution or records of the formation and financing process. Those materials should be read together. Posting an amount to a shareholder account alone does not prove whether the contribution was timely.

For partial payments, record each payment with its date and amount. The account then shows which part remained open and when it was paid. It should also state whether the payment schedule was later changed by agreement.

Transfer money received for the partnership in time

The second case concerns money a shareholder received for the partnership and had to transfer to the partnership assets. Section 1183(1) ABGB focuses on the day on which that transfer should have been made. The receipt date and the due transfer date must therefore be recorded separately.

The classification starts with the underlying partnership transaction and the applicable transfer arrangement. The agreement, internal arrangements, payment record and accounting entry may all be relevant. A later combined transfer does not erase the earlier receipt or the date on which transfer was due.

The schedule should show the amount received, recipient, purpose, receipt date, due transfer date and actual transfer. Credits, refunds and partial transfers belong on separate lines so that retained partnership money remains identifiable.

Unauthorised withdrawal: interest from the withdrawal date

The third case covers an unauthorised withdrawal from the partnership assets. Under section 1183(1) ABGB, interest starts on the day the withdrawal occurs. The account movement or other record of the outflow should therefore be secured with the specific withdrawal date.

Whether a withdrawal was unauthorised depends on the applicable agreement, a shareholder resolution and the authority for that particular money movement. An authorised payment, an agreed private withdrawal and an unauthorised removal are different situations. The accounting label alone does not decide the issue.

If money is later returned in whole or in part, record the return separately with its date and amount. The original withdrawal remains traceable and the later calculation can be aligned with the actual flow of money.

Organise the interest start and calculation

Section 1183(1) ABGB fixes the starting point: for a contribution or transfer it is the day payment was due, while for a withdrawal it is the day of withdrawal. The provision does not state a particular percentage in this subsection. An account should therefore not infer a rate that the statutory wording does not provide.

Each item should have its own line for principal amount, money movement, due or event date, return and outstanding balance. A single combined figure is unsuitable where several events have different interest starts and partial repayments.

The applicable rate, the end of the relevant period and any effective contractual variation require separate review against the relevant legal rules and the partnership agreement. Section 1183 ABGB itself securely supplies the relevant trigger date.

Further loss may remain available alongside interest

Section 1183(2) ABGB does not exclude a claim for further loss. Interest is therefore not necessarily the complete possible consequence of a late contribution, late transfer or unauthorised withdrawal.

Any further loss should be recorded separately from interest. The money movement, additional disadvantage, sequence of events and connection with the shareholder’s conduct require separate review. A presumption or flat surcharge does not replace that analysis.

The file should consequently place interest and further loss in separate sections. It then remains clear which part follows from the statutory interest trigger and which additional item requires its own reasoning and calculation.

Align the agreement, account and supporting records

A reviewable account starts with the partnership agreement and later arrangements on contributions, transfers and withdrawals. Add resolutions, payment records, bank statements, accounting entries and communications on due dates or repayment. The documents must describe the same sequence of events.

The article Resolution minutes as evidence among shareholders explains the practical value of a clear wording, version and record of a decision. It concerns a GmbH, but the documentation lesson is separate from the classification of a GesbR money movement under section 1183 ABGB.

For the organisation of recurring figures and records, the article Contractual information package for minority shareholders provides useful points of reference. For the GesbR review, also prepare a chronology of receipt, due transfer, withdrawal, repayment and outstanding amount.

Frequently asked questions on interest under section 1183 ABGB

Set out a section 1183 ABGB claim so it can be checked

Before sending a payment request, assign each money movement to one of the three cases. The table should include at least the amount, event, due or actual date, supporting record, repayment, outstanding balance and interest calculated separately.

Use separate sections for the cash contribution, received partnership money and withdrawal. Add the arrangements and resolutions on authority together with a short chronology. If further loss is claimed, give it its own item and reasoning.

For a specific review, collect the partnership agreement, amendments, resolutions, bank statements, payment records and earlier accounts. We can assess the classification under section 1183 ABGB, the relevant date and the separation of interest from further loss. Readers who want regular company-law updates can subscribe to BRANDaktuell legal updates.