Amending the articles of association: what it takes

Articles of association are rarely left unchanged for long. New shareholders, a capital increase, a changed corporate purpose or new consent requirements for management lead sooner or later to an amendment.

Majority

Amending the articles of association generally requires a majority of three-quarters of the votes cast. The articles of association may provide for stricter requirements, for example unanimity for certain matters. Interference with the special rights of individual shareholders requires their consent.

Form

The amending resolution must be recorded by a notary (notarielle Beurkundung). Anyone who records an amendment by circular resolution or in a simple minute without a notarial record has not brought it about in law; the mistake often comes to light only in proceedings before the Austrian companies register (Firmenbuch).

Effectiveness

The amendment must be filed with the companies register; it only becomes effective on registration. Between the resolution and registration there is therefore a period in which the old version still applies. In transactions with several successive steps, this sequence must be planned for.

The most common mistake

Amendments are resolved, but the ancillary documents are not brought into line: the shareholders' agreement, the management's rules of procedure, participation agreements. Two documents then contradict each other; in a dispute, what counts is which one takes precedence.