Impairment of creditors' interests

Liability to creditors

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

  • impairment of creditors' interests due to gross negligence
  • making payments after the start of the insolvency (favouring creditors)
  • 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
  • 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

Criminal offences

The impairment of creditors' interests may be punishable by criminal law under certain conditions with up to 10 years of prison.

Impairment of creditors' interests due to gross negligence

A person may be liable to prosecution by committing bankruptcy, for example, by grossly negligently

  • bringing about insolvency or
  • suppressing or restricting payments to at least one creditor with knowledge or negligent ignorance of insolvency

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.

Fraudulent bankruptcy

A debtor is also liable to prosecution if she/he intentionally reduces the assets, actually or apparently, and thus thwarts or reduces the satisfaction of the creditors (e.g. conceals, disposes of, damages assets). This applies irrespective of insolvency proceedings or insolvency.

Benefiting a creditor

This act addresses a mere postponement with the level of the settlement fund remaining the same overall that serves to favour one or more creditors.


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

Legal bases

Translated by the European Commission
Last update: 1 January 2024

Responsible for the content: Federal Ministry of Justice

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