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November 2025 – In its recent decision (OGH 16.9.2025, 6 Ob 135/24g), the Austrian Supreme Court (“OGH”) confirmed key principles on the validity of option agreements in shareholder agreements and the need for a shareholder resolution in case of transfer restriction clauses. Hence, the decision is highly relevant for Austrian limited liability companies and their (future) shareholders, in particular private equity investors and family offices.
1. Underlying facts:
The case under review involved an Austrian limited liability company (GmbH) (the “Company”) that was established by articles of association dated 30 April 2021 (the “AoA”). The shareholders are (i) a private foundation (Privatstiftung) (the “Shareholder A”) and (ii) three natural persons (collectively the “Shareholders B”). Since the Company's foundation, “C” (also one of the Shareholders B) has acted as its only managing director.
The shareholders also concluded a shareholders' agreement (the “Shareholders' Agreement”) which stipulated among other things that the Shareholders B thereby offer their respective share in the Company for sale to Shareholder A, upon the occurrence of certain trigger events. The offer was stipulated to be valid as long as the respective offeror is a shareholder of the Company and to be acceptable by Shareholder A, with one of the trigger events being the resignation of C as managing director of the Company for any reason whatsoever.
Acceptance by Shareholder A could be averted (after occurrence of such trigger event) if, within 14 days following the managing director's resignation, another one of the existing shareholders under the age of 65 was appointed as managing director of the Company.
Furthermore, the AoA included a restriction on transferability, according to which the transfer, division, and encumbrance of shares to other shareholders and/or third parties requires the consent of the Company and the shareholders by unanimous resolution.
On 7 November 2023, C announced his resignation as managing director of the Company and—by notarised declaration of acceptance on the same day—Shareholder A declared to the Shareholders B that it would accept the offer to purchase and take over the respective shares covered by the option.
The Company subsequently filed an application to register the respective shareholder change with the companies' register. However, the Shareholders B requested the application to be dismissed, arguing that the offer on which the assignment was based was invalid, as it is against bonos mores principles.
2. Bonos mores and objectivity of the provision in the shareholders' agreement:
The Supreme Court qualified the offer in the shareholders' agreement as an option agreement.
It addressed the question whether the option agreement resulted in an excessively long commitment of the Shareholders B. According to established case law, the time limits specified in Section 936 of the Austrian Civil Code (“ABGB”) do not apply analogously to options/option agreements. Therefore, an option/option agreement does not require a time limitation to be valid. The duration of the option's/option agreement's validity must be determined by interpretation of the relevant contracts.
Whether the case at hand involved an excessively long commitment period was determined to be irrelevant, as the prohibition of excessively long commitment periods would not lead to the agreement being void in its entirety. In B2B transactions, as in the present case, a judge would (only) have to adjust the term of the commitment so that it is no longer “unreasonable” (geltungserhaltende Reduktion). Since the offer was already accepted in November 2023, the term was in any case deemed as not being unreasonable. Furthermore, the transfer of shares (i.e., the acceptance of Shareholder A) could have been avoided by the Shareholders B if a new managing director – being a Shareholder B – had been appointed within the 14-day period (which had not occured in the present case).
The Supreme Court did also not consider the condition precedent to be unreasonable or against bonos mores principles because the Shareholders' Agreement was based on a division of labour. Shareholder A bore the entire entrepreneurial risk, while the Shareholders B contributed through their management activities. However, with the resignation of C as the Company's managing director, this division of labour ceased to exist. The option agreement was intended to regulate precisely the consequences of the termination of said division of labour. Such termination also provides the objective justification for Shareholder A to acquire the shares of the Shareholders B in return for compensation.
3. Regarding the transfer restriction clause in the articles of association:
The Supreme Court had previously deemed implied approval of restricted share transfers sufficient if all shareholders approvingly participate in such share transfer, meaning that no separate shareholder meetings or written resolutions are required.
Consistent with previous decisions, the Supreme Court clarified that the submission of an assignment offer is to be regarded as at least conclusive consent on the part of the respective shareholder, and that implied consent is not precluded by the fact that the Shareholders' Agreement stipulates a requirement for the Company's consent to such transfer as well.
Therefore, the consent of the Shareholders B to the transfer of the shares had already been given by the conclusion of the Shareholders' Agreement. No (implied) revocation of this consent by the Shareholders B after the transfer of the shares was completed (in the sense of the receipt of the declaration of acceptance) is possible.
4. Conclusions:
From a practical standpoint the following conclusions can be highlighted:
- the Supreme Court reemphasised that an implied approval of the transfer of shares is sufficient in case of transfer restrictions in a company's AoA;
- an agreed requirement for a company's consent to the transfer of shares is not necessary if all shareholders of the respective company are involved in the transfer;
- the time limits set out in Section 936 of the Austrian Civil Code (ABGB) do not apply to option agreements; therefore, the effective duration of an option agreement must be determined by interpretation of the relevant contracts; and
- in the event of an excessively long commitment to an offer in a B2B option agreement, a reduction must be made to maintain validity (geltungserhaltende Reduktion) via a judicial right of moderation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
