- Good cause is generally considered to exist if, based on the specific circumstances of the case and a balancing of the interests of all shareholders, it is no longer reasonable to expect the other shareholders to allow the shareholder to remain in their position as managing director, because the continuation of the managing director's activities would significantly jeopardize the interests of the company (6 Ob 191/25v ErwGr 2; RS0059623 [T1]).
- In conjunction with Sections 117 and 127 of the Austrian Commercial Code (UGB), Section 16 (2) of the Limited Liability Companies Act (GmbHG) cites gross breach of duty or inability to properly manage and represent the company as examples of grounds for removal. In this context, the overall circumstances of the individual case must be assessed—particularly with regard to the interests of the company—while balancing the interests of all shareholders. In addition to the activities and merits of the shareholder-managing director, the conduct of the other shareholders and any misconduct on their part must also be taken into account (RS0059623 [T2]; RS0118174; RS0059647).
- When assessing whether a gross breach of duty constitutes good cause for the removal of a managing director, the potential damage caused by the breach of duty as well as its temporary or permanent nature must also be considered (RS0059403 [T6]).
- In a "personalistic" capital company, personal circumstances should be taken into account (6 Ob 63/03p ErwGr 2). However, personal animosities or family disputes—as well as disagreements over business policy between managing directors and/or shareholders (6 Ob 213/07b ErwGr 1; RS0059403 [T7])—do not generally constitute good cause for the withdrawal of management authority (6 Ob 191/25v ErwGr 2; 6 Ob 55/20m ErwGr 3; RS0059403 [T22]).
- Serious insults or physical altercations directed at other shareholders or their relatives may constitute good cause, provided that the pursuit of the company's purpose in a spirit of cooperation can no longer be expected due to a breakdown in the trust between the shareholder-managing directors (6 Ob 97/25w ErwGr 2.2; RS0059403 [T23]).
- Gross breaches of duty that constitute grounds for removal must relate to duties associated with the management of the company. They require gross negligence or intent.
- Managing directors are obligated to monitor one another. In the present case, the areas of activity to be monitored also include the supervision of management within the company's subsidiaries as the parent company (cf. RS0059544).
- Culpably airing internal conflicts in a way that damages the business—for example, to customers or other contractual partners—can constitute a gross breach of management duties.
- Even non-culpable, long-term illness or a significant reduction in performance due to age can constitute good cause for removal under Section 16 (2) GmbHG; even a partial inability to fulfill management duties may be sufficient (4 Ob 507/90 = RS0059626).
- In these cases, too, good cause is generally only assumed if, based on the specific circumstances of the case and a balancing of the interests of all shareholders, it is no longer reasonable to expect the other shareholders to allow the shareholder to remain in their position as managing director, because the continuation of the managing director's activities would significantly jeopardize the interests of the company (RS0059623).
Supreme Court (OGH) June 30, 2026, 6 Ob 112/25a
