What happens to shareholder rights if the sole shareholder of a limited liability company (GmbH) is no longer able to act personally? The Austrian Supreme Court (OGH) clarified that, in principle, a person appointed as a representative for incapacity can also exercise shareholder rights after the occurrence of the incapacity – however, the specific scope of the power of attorney is crucial.
The shareholder in question was the sole shareholder and only managing director with independent power of representation of a limited liability company (GmbH). He had granted his wife a power of attorney, which was registered in the Austrian Central Register of Representatives. After his incapacity, his wife exercised the shareholder's voting rights at a general meeting. At that meeting, a holder of procuration was appointed as the managing director with independent power of representation. Simultaneously, the managing director's power of attorney was to be revoked. The commercial register court refused the registration. The appeals court also found the requirements not to be met, because in its opinion, the power of attorney did not provide a sufficient basis for exercising the shareholder's rights.
The Supreme Court (OGH) upheld the appeal. Upon the power of attorney taking effect, the attorney becomes the legal representative within the meaning of Section 1034 Paragraph 1 Item 2 of the Austrian Civil Code (ABGB). This means that, in principle, they can also exercise shareholder rights under the Limited Liability Companies Act (GmbHG). However, the decisive factor is the scope of the specific power of attorney. Not every power of attorney automatically authorizes all corporate law actions. In the present case, the Supreme Court found the power of attorney to be sufficiently broad. The circumstances indicated that the principal intended to entrust his wife comprehensively with the management of his affairs. This included voting rights that influence the management of the limited liability company. Therefore, the wife was entitled to exercise the voting rights of the sole shareholder and to participate in the appointment of the new managing director.
This decision demonstrates that a power of attorney can be of considerable importance for the corporate legal capacity of a limited liability company (GmbH). The occurrence of the event triggering the power of attorney does not necessarily render the company incapable of acting. Therefore, it is advisable for entrepreneurs, and especially family-owned companies, to formulate powers of attorney as specifically as possible. In particular, the exercise of shareholder and voting rights, as well as the appointment and removal of managing directors, should be explicitly covered.
Supreme Court 22.04.2026, 6 Ob 77/25d