Austrian Supreme Court Expands Power of Attorney Scope in Director Appointments

Austria's Supreme Court (OGH) has issued a significant ruling clarifying the powers granted by a general power of attorney in corporate governance. The decision allows a spouse, equipped with a "general and unrestricted power of attorney," to appoint a new managing director for a limited liability company (GmbH) when the original director loses legal capacity due to an accident.

The case involved a family business where the managing director became incapacitated. His wife, acting under a pre-existing power of attorney, sought to appoint a new managing director. However, the Commercial Court and the Higher Regional Court of Vienna rejected the application, citing a lack of a specific voting proxy as required by the GmbH Act.

Reversing these lower court decisions, the OGH found that the power of attorney, which explicitly referenced the company and granted "comprehensive influence on the management of the company," was sufficient. The court reasoned that the incapacitated director intended to grant his wife broad authority, including the selection of a managing director. This interpretation ensures that the appointed employee can be registered as a managing director in the company register, as represented by lawyer Holger Schwarz.

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in every respect to grant comprehensive influence on the management of the company