Section 42(3) GmbHG allows a court security order in a nullity action. Review the application, amount, deadline, deposit and consequences.
Your shareholder dispute team
Dispute team for shareholders and managing directors
A shareholder dispute calls for corporate law, litigation strategy and commercial understanding from one team. Mag. Bernhard Brandauer is responsible for the legal advice; depending on the conflict, further specialised lawyers of the firm support safeguards, evidence, negotiations and court enforcement.
Contact the teamIn an action for the nullity of a shareholder resolution, the court may order the claimant to provide security on application if the company faces a threatened disadvantage. Section 42(3) GmbHG leaves the amount to the court’s discretion and refers questions of the deadline, sworn confirmation and failure to provide security to the Austrian Code of Civil Procedure rules on security for procedural costs.
This order does not decide whether the nullity action is well founded or whether the challenged resolution is effective. It creates a separate procedural duty for the claimant. The action, the court order, the deadline and the response to the order must therefore be reviewed separately.
The served order is particularly important. It must show the amount to be deposited, the deadline for the deposit or sworn confirmation and the possible consequences if the deadline passes without action.
Already know you want to get in touch? Go straight to the enquiry form.
Organise the challenged shareholder resolution, the action and the subject matter of the court proceeding. Section 42(3) GmbHG concerns a security order in a nullity action. The rule cannot be transferred to another action without review.
Obtain the complete court order, proof of service and the defendant’s application. Check whether the threatened disadvantage to the company is identified and whether the amount and deadline are comprehensible.
Compare the amount in the order with the deposit instruction and the court confirmation. Record the start of the deadline, its final day and the actual deposit so that compliance remains traceable in the file.
Inability to deposit is not merely an informal statement. Under section 60 ZPO, the claimant must apply within the court’s deadline for a hearing at which the inability can be confirmed under oath. The served order and specific deadline remain decisive.
Review the expiry, service and every response already filed without delay. Under section 60(3) ZPO, the court may, on the defendant’s application, declare the action withdrawn. In appeal proceedings, the appeal may be deemed withdrawn.
Section 42(1) GmbHG governs an action for the nullity of a shareholder resolution and provides that the action is brought against the company. Within that proceeding, section 42(3) GmbHG may become relevant on application if the company faces a disadvantage from the proceeding. The application and its procedural position must be reviewed in the file.
The security order is a procedural ancillary issue. The court does not decide through it whether the resolution is actually null. Nor does the security replace the statement of the defect, the relief sought or the facts on which the action relies.
This distinction prevents confusion with the minority action under section 48 GmbHG. In that action, a qualified minority pursues a claim belonging to the company. The minority action against management therefore has a different subject matter and procedural function.
The court may order security under section 42(3) GmbHG on application. A general concern or reference to the costs of litigation does not replace the review of the threatened disadvantage to the company and the specific application. The order must be read together with the proceeding and the circumstances presented.
Section 42(3) GmbHG does not state a fixed percentage or a flat minimum amount. The court determines the security in its discretion. The order should therefore make the amount and the procedural assessment traceable. The amount cannot be inferred from a general online calculation.
The ZPO supplies the procedural framework for the deposit and consequences through the reference in section 42(3) GmbHG. It does not turn the provision into an automatic security in every nullity action. The application, threatened disadvantage and court decision remain separate points of review.
Section 42(3) GmbHG refers questions of setting a deadline for the deposit and confirming inability to deposit under oath to the ZPO rules on security for procedural costs. Section 60(1) ZPO provides that the amount and deadline are determined together. Within that deadline, the security must be deposited with the court or the inability to deposit must be confirmed under oath.
Anyone relying on inability to deposit must apply to the court hearing the action within the open deadline for a hearing under section 60(2) ZPO. Subject to the statutory requirements, the oath may also be taken before the court at the claimant’s domicile or place of residence. An informal message to the opposing party does not replace these steps.
For calculating the deadline, bring together the served order, the start of the deadline, its final day and the action actually taken. If service or the content is uncertain, the original order and proof of service are decisive. The court should not have to work from a calendar assumption detached from the file.
Section 60(3) ZPO provides a specific consequence when the set deadline expires without success. On the defendant’s application, the court may declare the action withdrawn. If the application is made during appeal proceedings, the appeal filed by the claimant may be deemed withdrawn. This consequence does not follow from a statement by the opposing party alone; it requires a court order.
Before making that order, the claimant must be heard orally or in writing. Evidence of the deposit, application for a hearing, oath, service and any obstacles should therefore be secured immediately. The procedural withdrawal consequence says nothing about whether the challenged shareholder resolution was substantively null.
Section 61 ZPO concerns the period while a timely application for security is awaiting decision. Section 62 ZPO governs continuation after a timely deposit or oath and allows an application to supplement insufficient security. These procedural steps must be checked against the actual court order and stage of the nullity action.
The file should contain the articles of association, challenged shareholder resolution, action, application for security, court order and proof of service in one chronology. Add the amount, deadline, deposit or application for a sworn confirmation and every response from the court.
Security must be distinguished from the question whether a defect leads to nullity. The interim injunction under section 42(4) GmbHG has a different subject: it concerns postponing implementation of the challenged resolution where an irreparable disadvantage is credibly shown. Procedural security and protection against implementation are therefore not the same remedy.
After an exclusion or departure, a separate dispute may concern valuation and payment for the GmbH share. The article on compensation after exclusion from a GmbH addresses that economic dispute and does not replace deadline review in a nullity action.
For a concrete assessment, preserve the complete file, envelopes, electronic service records, deposit confirmation and court filings. Only this sequence shows whether the order was complied with, challenged in time or followed by an application to supplement the security.
In an action for the nullity of a shareholder resolution, the court may order security on application if the company faces a disadvantage. The application, proceeding and court order must be reviewed in the individual case.
No. Section 42(3) GmbHG leaves the amount to the court’s discretion. The served court order, not a flat calculation from the amount in dispute, is decisive.
Under the reference to the ZPO, the security must be deposited with the court within the set deadline or the inability to deposit must be confirmed under oath. Under section 60(2) ZPO, an application for a hearing must be made in time.
Under section 60(3) ZPO, the court may, on the defendant’s application, declare the action withdrawn. If the application is made during appeal proceedings, the appeal may be deemed withdrawn. The claimant must be heard first.
Section 61 ZPO provides that, where an application was made in time, the defendant is generally not required to continue the main proceeding until the application is decided. The actual procedural position must be checked in the court file.
No. Security concerns the claimant’s procedural duty under section 42(3) GmbHG. An interim injunction under section 42(4) GmbHG concerns postponing implementation of the challenged resolution.
Safeguard, challenge and enforce shareholder disputes. Portal for active GmbH conflicts covering first safeguards, resolution challenge, exclusion and preliminary injunction.
Contact