When an Austrian court removes a foundation board member under section 27 PSG and how prognosis, evidence and transition are assessed.
BRANDAUER Rechtsanwälte
Foundation law team, Salzburg and throughout Austria
Your matter is handled by a team combining corporate law, asset succession, real estate law and dispute resolution. We review the foundation declaration, board resolutions, information rights and liability issues and set out clear next steps. Mag. Bernhard Brandauer is responsible for the legal advice, supported by further specialised lawyers of the firm where the matter requires it.
Judicial removal of a foundation board member does not always require that financial loss has already occurred, but it always requires important cause. Section 27(2) PSG lists serious breach of duty, inability to perform the role properly and specified insolvency and enforcement circumstances.
Established Supreme Court case law assesses important cause by reference to the functioning of the private foundation. The question is whether pursuit of the foundation purpose remains sufficiently secure in the future. Personal dislike or a mere disagreement about strategy is not enough.
This article examines the personal remedy. Foundation disputes and enforcement also covers information, special audit and claims. The ongoing standard of care appears under foundation board and liability.
The statute lists several groups. Not every mistake is a serious breach. The breach must carry sufficient weight when viewed against the duty, fault, consequences, recurrence and significance for the foundation. Several incidents can form important cause in their combined effect.
Inability to perform the role is not confined to professional qualification. Lasting illness, refusal to participate, complete inability to communicate or an unmanageable conflict of interest can impair the foundation. Temporary difficulty must be distinguished from a sustainable adverse prognosis.
Section 27(2) also contains specified insolvency, enforcement and debtor-register situations. They must be tested against the current wording and the individual member. A general assertion of financial difficulty is not a substitute for the statutory conditions.
The foundation declaration may add grounds for removal but cannot exclude important cause under the statute. Legal principle RS0112248 confirms that the constitution cannot displace the court’s protective function.
An unpleasant or contested event is not necessarily an important cause.
| Situation | Usually insufficient alone | Potential removal relevance |
|---|---|---|
| Discretion Strategy dispute | defensible decision based on adequate information | decision driven by extraneous interests or no information |
| Information | reasoned review of scope and confidentiality | persistent unjustified refusal under section 30 PSG |
| Loyalty Conflict of interest | disclosed and handled correctly | concealed, repeated and decisive |
| Deadlock | short-term substantive disagreement | lasting paralysis of the foundation purpose |
The examples do not replace case-specific analysis. Several less serious breaches may become relevant together.
In RS0112248, the Austrian Supreme Court identifies the central test: important cause is assessed by reference to whether the foundation functions and whether its purpose will be pursued with sufficient certainty in future. The court therefore considers both past conduct and its future significance.
A single breach may be serious enough if it permanently destroys trust in essential safeguards. Conversely, a mistake need not lead to removal where it was defensibly addressed, recurrence is unlikely and the foundation operates properly again.
A private foundation has no owners or shareholders providing ordinary control. Case law therefore emphasises a functioning organisation and efficient supervision. This explains why the threshold is not treated like termination of a purely personal contract.
The prognosis requires facts: conduct after discovery, willingness to document, handling of conflicts, response to audit findings, cooperation within the board and concrete effects on assets and purpose. Moral labels do not assist the court.
Applicant and board member both need a complete and dated facts file.
Reconcile court powers, governing-body powers and the declaration.
Legal basis: Section 27 PSG, Section 14(3) and (4) PSG
Connect statute, declaration and allocation of functions.
Arrange resolutions, minutes, reports and correspondence.
Combine fault, consequences, duration and recurrence.
Show consequences for purpose, control and cooperation.
Legal basis: Austrian Supreme Court RS0112248
Prepare representation, replacement and access to records.
Section 27(2) permits removal on application or ex officio. Formal standing and participation depend on governing status, the right affected and case law. Beneficiary status should therefore not be equated automatically with formal standing.
A person without established party status can nevertheless bring concrete facts to the court’s attention. The court decides whether to act ex officio. Supplying information does not automatically confer all procedural rights of a party.
Where information is missing, section 30 PSG may be the first route. For specified suspicious transactions, a body or member with standing may consider a special audit under section 31 PSG. The instruments perform different functions.
The affected board member can contest facts and legal assessment. A sound defence discloses decision materials, documented balancing and corrective steps rather than dismissing the matter as merely a family attack.
The strongest material is contemporaneous and original: signed resolutions, complete minutes, audit reports, contracts, valuations, bank records and provably sent correspondence. Later recollections should be identified as such.
If concrete harm threatens during the proceeding, separate interim or organisational protection may need examination. Filing a removal case does not automatically suspend representation or payment authority.
After removal, representation, commercial-register entries, bank mandates, digital access, records and deadlines need an orderly handover. If a required member is missing and the appointment mechanism fails, the court may appoint under section 27(1) PSG.
Damages are separate. Removal protects future functioning; it does not automatically determine loss, causation or recovery. The two objectives need separate planning.
The tree addresses duty, evidence and future risk. It does not replace procedural advice.
Would you like us to review cause or defence?
Separate personal tension from governing duties and clarify facts, duration and effects on the foundation purpose.
Preserve originals and organise both adverse and exculpatory circumstances before starting a sharp proceeding.
Derive concrete risk to purpose, controls and functioning. Criticism of the past alone is insufficient.
Plan replacement, representation and handover alongside the proceeding so the foundation remains functional.
Present important cause, evidence, prognosis and transition in one coherent application file.
The principal judicial remedies in context.
Duties, conflicts and standard of responsibility.
Court examination of specified transactions.
Governing rights and limits in appointment and removal.
In foundation law, structure, deadlines and evidence decide. Call us directly or write to us, callback within one business day.
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