Banking and Finance (27)

Corporate Law (20)

Employment (15)

Insolvency and Restructuring (20)

Real Estate (16)

Tax Law (19)

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Terms found Action for the restoration of ownership Amended dismissal Annuity Appeal against a decision Asset Assignment of Claims (Cession) Austrian Public Employment Service (AMS) Banking secrecy Bankruptcy proceedings BaSAG Book value / carrying amount Branch Brokerage Agreement Building Law Business Business entity Call for Tenders Capitalisation Casual Employment Certification Change in Operations Collective Bargaining Agreement Company Agreement Company Pension Comparison of business assets Compensation Compliance Compulsory enforcement Consumer Protection Act Corporate Reorganisation Act (URG) Corporation Covenants Debt restructuring Debtor Declaration of consent Decree Deferral Discount Dividend Double taxation Double-entry bookkeeping Easement Employee Stock Ownership Equity Equity loan Factoring Fees Act Financial plan Foreclosure sale Foreign-currency loan General partnership General Protection Against Dismissal Global assignment GmbH Group taxation Guarantee Guarantee credit Hidden reserves Hire Purchase Insolvency Insolvency Act Insolvency administrator Insolvency estate Insolvency register Inspection of the Land Register Inventory Land Register Letter of comfort Lien Limited partnership Liquidation Loan Loss Carryforward Maternity leave Merger Natural person Nominal value Option Outsourcing Part-time work Partnership Personal insolvency Pledge principle Preliminary decision on an appeal Progression Prohibition of alienation and encumbrance Prohibition on the repayment of deposits Property income tax Provision Proxy Public Limited Company Reallast Repayment Restriction on Transfer Restructuring proceedings Retention of title Revision Right of first refusal Right of retention Rights in rem Self-consumption Severance Pay Severance Pay new Severance Pay old Shareholder loans Short-time work Silent partnership Skimming procedure Social Plan Sole Proprietorship Standard value Stock Subscription right Superstruction Supervisory Board Tenancy agreement Works Council

Prohibition on the repayment of deposits

What is the prohibition on the repayment of deposits?

Shareholders may not reclaim their capital contributions and, furthermore, for as long as the corporation exists, are only entitled to the retained profits shown in the annual accounts. The prohibition on the repayment of capital contributions precludes any preferential treatment of shareholders or of persons attributable to a shareholder, such as group companies. Any transfer of assets from the company to a shareholder that is not business-related and is therefore not objectively justified, and thus disproportionate transfer of assets from the company to a shareholder, whether by contract or otherwise, which benefits the shareholder at the expense of the company’s assets and which is contrary to the principles of conduct expected of a prudent and conscientious director. Typical examples include sales transactions in which there is a significant imbalance between the consideration provided and that received, or, indeed, unilateral payments made by the company.

What happens if the prohibition on the repayment of deposits is breached?

In the event of a breach of the prohibition on the repayment of capital contributions, the company is entitled to a claim for reimbursement against the partner or shareholder who received the unlawful payment; this claim is subject to a limitation period of five years. Where the prohibited distribution has reduced the share capital of a limited liability company and it is not possible to obtain payment from the shareholder or managing director who received the payment, the remaining shareholders are liable on a subsidiary basis. In the case of a public limited company, there is no joint and several liability. In the event of a breach of the prohibition on distributions, the members of the management board or executive board are also liable if they are at fault and the company has suffered loss. This will be the case if the payment in breach of the prohibition on distributions, or the difference in value, can no longer be recovered from the receiving shareholder, for example because the latter is insolvent. The prohibition on the repayment of capital contributions also applies to a GmbH & Co KG.

Learn more about our Corporate / M&A division. Please feel free to contact us for further information.