Brexit has not only had economic consequences; it has also brought a wide range of implications for company law. In its recent case law, the Austrian Supreme Court held that British companies with their administrative seat in Austria lose their legal capacity after Brexit (27 January 2022, 9 Ob 74\/21d). The Austrian Supreme Court thereby follows the German case law: the Higher Regional Court of Munich had already held on 5 August 2021 that a British limited company with its administrative seat in Germany has neither party capacity nor legal capacity (OLG Munich, 29 U 2411\/21 Kart).<\/p>\n
1. Loss of legal capacity
\nIn its well-known \u201ctrilogy\u201d of company-law decisions (Centros, \u00dcberseering and Inspire Art), the Court of Justice of the European Union held that the freedom of establishment permits a foreign company to establish itself in another Member State without having to change its original corporate form when crossing borders. Outside the scope of EU law, however, the legal capacity of a foreign legal entity is, as a rule, to be assessed under the law of the state of its seat. Since the Withdrawal Agreement contained no provisions on the recognition of the legal capacity of British companies, the Austrian Supreme Court concluded that, from an Austrian perspective, the limited company loses its legal capacity. The Supreme Court nevertheless held that, where there is a plurality of shareholders, the company is to be regarded as a civil-law partnership. In the case of a single-member company, the rights and obligations are attributed directly to the sole \u201cshareholder\u201d.<\/p>\n
2. Personal liability
\nThe \u201cformer shareholders\u201d are liable for the obligations of their limited company with all of their private assets. If they are unable to satisfy the company\u2019s debts, enforcement against their private assets or personal insolvency may follow. In addition, the limited company no longer has procedural or party capacity; outstanding claims of the limited company must therefore now be brought by its shareholders in their own name.<\/p>\n
3. Tax consequences
\nIn light of the case law, the British limited company is no longer to be regarded as a taxable entity for corporation tax purposes. As a consequence, hidden reserves are disclosed and subjected to taxation at a rate of 25%.<\/p>","protected":false},"excerpt":{"rendered":"
Brexit has not only had economic consequences; it has also brought a wide range of implications for company law. In its recent case law, the Austrian Supreme Court held that British companies with their administrative seat in Austria lose their legal capacity after Brexit (27 January 2022, 9 Ob 74\/21d). The Austrian Supreme Court thereby […]<\/p>\n","protected":false},"author":29,"featured_media":55778,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[139],"tags":[],"class_list":["post-55777","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-en"],"acf":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t