Impairment of creditors' interests

Generally, the managing director is liable to company creditors for:

  • impairment of creditors' interests due to gross negligence (section 159 of the StGB)
  • making payments after the start of the insolvency (favouring creditors, section 158 of the StGB)
  • not submitting an application to open insolvency proceedings in a timely manner
  • for the Federal Government, in terms of demands for payment of levies and for the Social Insurance Carrier, in terms of contributions in accordance with the ASVG (Federal Act on General Social Insurance) (section 9 of the BAO and section 67 paragraph 10 of the ASVG)
  • failure to apply for reorganisation proceedings despite a presumed need for reorganisation and failure to detail or failure to review the annual accounts for GmbHs that are subject to mandatory review in accordance with the accounting regulations, in the event of insolvency proceedings being opened


In general, these rules also apply to entrepreneurs from EU Member States in Austria.

The impairment of creditors' interests may be punishable by law under certain conditions.
The forms that this offence can take are as follows:

  • the bringing about of insolvency (section 159 paragraph 1 of the StGB); and
  • the suppression or restriction of payments to at least one creditor with knowledge or negligent ignorance of insolvency (section 159 paragraph 2 of the StGB);

in each case as a result of bankruptcy through negligence.

By law, bankruptcy through negligence occurs when, contrary to the principles of sound management, a person:

  • destroys, damages, renders useless, squanders or surrenders a substantial part of their assets;
  • expends excessively large amounts through unusually risky business that does not form part of their customary business activity, through gambling or betting;
  • has excessive expenditure that is in stark contrast to their financial circumstances or economic performance;
  • fails to keep accounting or business records or keeps them in such a way as to make it very difficult to obtain a real-time overview of their actual asset, financial and profit situation, or fails to implement other control measures suitable and necessary to provide such an overview; or
  • fails to draw up financial statements, as she/he is obliged to do, or draws those statements up in such a way or with such a delay as to make it very difficult to obtain a real-time overview of their actual asset, financial and profit situation.

In addition to the grossly negligent impairment of creditors' interests, the debtor's intentional acts (in considering damage to be seriously possible and accepting it) in connection with insolvency can only result in the offence of bankruptcy through negligence (section 156 of the StGB). Fraudulent bankruptcy (section 156 of the StGB) penalises an actual or apparent move to limit the creditors' shared settlement fund which in most cases would in practice be intended to benefit the bankrupt party. Conversely, section 158 of the StGB (benefiting a creditor) addresses a mere postponement with the level of the settlement fund remaining the same overall that serves to favour one or more creditors.

Please note

In 2000, the offence of bankruptcy through negligence was replaced by the offence of grossly negligent impairment of creditors' interests. The legislative aim pursued was to decriminalise the taking of financial risks in the lower level of criminal liability and to restrict criminal liability to grossly negligent conduct alone. This means that not all wrongdoing that, in retrospect, resulted in insolvency or the impairment of creditors' interests is punishable by law, but rather only such conduct that is fundamentally capable of causing bankruptcy through negligence.

Legal basis

Translated by the European Commission
Last update: 1 January 2022

Responsible for the content: Federal Ministry of Justice

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