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Silent Partner Agreement for Austria

Silent Partner Agreement Template for Austria

An Austrian Silent Partner Agreement (stille Gesellschaft) is a specialized contract governed by the Austrian Commercial Code (Unternehmensgesetzbuch - UGB) that establishes a partnership between a business owner/company and a silent partner who makes a capital contribution in exchange for profit participation rights. This agreement defines the terms of the silent partnership, including capital contribution, profit/loss sharing mechanisms, information rights, and termination provisions, while maintaining the silent partner's non-public status and limited involvement in business operations. Under Austrian law, this arrangement offers unique advantages for capital raising while preserving management control and business privacy.

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What is a Silent Partner Agreement?

The Silent Partner Agreement (stille Gesellschaft) is a crucial document in Austrian business law used when a business seeks to raise capital without diluting operational control or public visibility. This agreement type is particularly valuable for businesses looking to expand their financial resources while maintaining existing management structures. Under Austrian law, specifically the Unternehmensgesetzbuch (UGB), the silent partner contributes capital to the business and receives profit participation rights but remains undisclosed to the public and has no management authority. The document typically includes detailed provisions on capital contribution, profit sharing, information rights, and exit mechanisms, making it essential for both established businesses seeking growth capital and investors looking for passive investment opportunities. The agreement must comply with specific Austrian legal requirements while addressing practical business needs and protecting both parties' interests.

What sections should be included in a Silent Partner Agreement?

1. Parties: Identification of the business owner/company and the silent partner with full legal details

2. Background: Context of the silent partnership formation and brief description of the business

3. Definitions: Key terms used throughout the agreement including 'Silent Partnership', 'Business', 'Capital Contribution', and 'Profit Share'

4. Formation of Silent Partnership: Declaration of silent partnership formation and its effective date

5. Capital Contribution: Details of the silent partner's contribution amount, payment terms, and form of contribution

6. Profit and Loss Participation: Formula and terms for calculating and distributing profits and losses

7. Information and Inspection Rights: Silent partner's rights to financial information and business records

8. Management and Control: Clarification that management remains with the business owner and scope of silent partner's non-involvement

9. Confidentiality: Obligations regarding business secrets and confidential information

10. Term and Termination: Duration of partnership and conditions for termination

11. Settlement upon Termination: Process and terms for settling the silent partner's account upon termination

12. Governing Law and Jurisdiction: Specification of Austrian law application and jurisdiction for disputes

What sections are optional to include in a Silent Partner Agreement?

1. Non-Competition: Restrictions on silent partner's involvement in competing businesses, used when silent partner has access to sensitive business information

2. Transfer Restrictions: Limitations on transferring the silent partnership interest, relevant for maintaining control over partnership composition

3. Death or Incapacity: Provisions for handling silent partner's interest in case of death or incapacity, important for individual silent partners

4. Additional Capital Contributions: Framework for potential future capital increases, useful for growing businesses

5. Tax Provisions: Specific tax handling agreements, relevant when special tax arrangements are needed

6. Dispute Resolution: Alternative dispute resolution procedures, useful for international partnerships or when seeking to avoid court proceedings

What schedules should be included in a Silent Partner Agreement?

1. Schedule 1 - Capital Contribution Details: Detailed breakdown of initial capital contribution, including valuation of any non-cash contributions

2. Schedule 2 - Profit Sharing Formula: Detailed calculation method for profit sharing, including any specific accounting principles to be applied

3. Schedule 3 - Business Plan: Overview of business activities and projections (if relevant to profit expectations)

4. Schedule 4 - Information Rights: Specific reporting requirements and timeframes for financial information

5. Appendix A - Definitions: Extended definitions and interpretations if too lengthy for main agreement

6. Appendix B - Initial Business Valuation: Valuation report or methodology used for establishing business value at partnership formation

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Austria

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions








































Clauses


































Relevant Industries

Manufacturing

Retail

Technology

Real Estate

Hospitality

Professional Services

Financial Services

Construction

Healthcare

Energy

Agriculture

E-commerce

Entertainment

Transportation

Education

Relevant Teams

Legal

Finance

Corporate Development

Investment

Tax

Compliance

Business Development

Executive Leadership

Corporate Secretariat

Treasury

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Managing Director

Finance Director

Legal Counsel

Corporate Lawyer

Investment Manager

Business Development Manager

Financial Controller

Tax Manager

Company Secretary

Private Equity Manager

Investment Advisor

Business Owner

Entrepreneur

Partnership Manager

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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