Before making the final decision to buy a company in Austria, the buyer usually conducts a due diligence procedure for the object in which he/she is interested. This is a very important part of the deal and should not be ignored. By the way, the statistics lead to the disappointing fact that up to 80 percent of the deals die right on the DD stage.
Depending on the nature of the business and the parties involved, due diligence can be expanded to strategic or specific operational issues, and can also include specific aspects such as environmental DD. Below we will briefly analyze the due diligence in Austria.
Buying a shelf company in Austria: seller's responsibility
If the seller does not inform the potential buyer of the circumstances related to the transaction, he may be liable for breach of pre-contractual obligations. In such cases, suppression of important information about the company may lead to the invalidation of the contract or amendments to the contract based on claims in error.
Usually, the parties try to exclude the possibility of such a development of the situation even at the stage of concluding a sales contract for a company in Austria. But if one of the parties had reason and deliberately concealed information about the company, then it will be difficult to exclude potential claims from the buyer.
Public information about the target company
Some information about the company is visible in open registries, therefore, due diligence of an Austrian company will not always be involved when intending to buy a company in Austria. Publicly available data is limited to information disclosed in:
- commercial register;
- land cadastre;
- insolvency register.
In accordance with EU legislation, Austrian SME may not disclose all information on financial statements.
The land registry indicates who owns a particular piece of land and whether any other rights are registered. Searches in the land registry using information only about the owner are strictly limited and are only permitted under very narrow circumstances. Thus, research into the ownership of a company's real estate must be supported by due diligence in Austria.
One can find full information about insolvency proceedings ever initiated against a company or a natural person in the insolvency register.
All information must be disclosed or provided during the due diligence procedure in Austria. If the buyer is aware of any shortcomings in the company, then he/she is not allowed to make a claim on the relevant issue since no one hid this information from the buyer and they were well aware of it.
Legal assistance for the company sale and purchase in Austria
Most of the information is publicly available for those who want to buy a business in Austria. Regardless of this, in order to avoid controversy and misperceptions, potential buyers resort to due diligence of a target company in Austria before buying it. By contacting IQ Decision UK, you will receive qualified assistance in conducting due diligence procedures in Austria, as well as comprehensive legal assistance for a transaction on the transfer of rights to a company in Austria. The expertise and long term experience of our professionals will help you get the best outcome of your deals.
