Legal Forms of Corporations in Germany
Comparison of the most relevant corporate bodies in Germany
In Germany, various legal entities can be managed as a corporation. The most commonly chosen legal forms are:
- the entrepreneurial company (Unternehmergesellschaft - UG),
- the limited liability company (Gesellschaft mit beschränkter Haftung - GmbH) and
- the stock corporation (Aktiengesellschaft - AG).
We would like to briefly introduce all three legal forms here - including a look at the simplified foundation procedure - and clarify the most important questions in a quick and simple manner:
- How many persons are required for foundation?
- Who holds the power of representation?
- How can company shares be transferred?
- Which legal form has the best reputation?
Overview of German legal forms:
|UG customized statutes||UG model statutes for simplified foundation procedure||GmbH customized statutes||GmbH model statutes for simplified foundation procedure||AG|
|Number of shareholders||Any||1-3||Any||1-3||Any|
|Number of managing directors (UG/GmbH), board members (AG)||Any||Max. 1||Any||Max. 1||Any (Supervisory board members may not be members of the board)|
|Number of supervisory board members||No supervisory board||No supervisory board||No supervisory board||No supervisory board||3|
|Share capital/nominal stock||Min. EUR 1||Min. EUR 1||Min. EUR 25,000||Min. EUR 25,000||Min. EUR 50,000|
|Number of persons required||Min. 1||Min. 1||Min. 1||Min. 1||Min. 4|
|Deposit upon foundation||Full deposit upon foundation||Full deposit upon foundation||¼ of each share, in total min. EUR 12,500||¼ of each share, in total min. EUR 12,500||¼ of each share, in total min. EUR 12,500|
|Possibility of individual articles||Yes||No||Yes||No||Yes|
|Liability||Generally limited to company assets||Generally limited to company assets||Generally limited to company assets||Generally limited to company assets||Generally limited to company assets|
|Possibility of non-cash establishment||No||No||Yes||No||Yes|
|Possibility of non-competition clause for shareholders||Yes||No||Yes||No||Yes|
|Possibility of exemption from statutory ban on competition for managing directors||Yes||No||Yes||No||Yes|
|Authorization to represent (in principle)||Managing director||Managing director||Managing director||Managing director||Board|
|Transfer of company shares (UG/GmbH), stock (AG)||Possible, but requires certification by notary||Possible, but requires certification by notary||Possible, but requires certification by notary||Possible, but requires certification by notary||Cost-effective transfer option because no notarial certification necessary|
|Flexibility in ongoing operations||Flexible||Less flexible||Flexible||Less flexible||Very formal, strict requirements of stock corporation law have to be considered|
|Reputation/prestige of the legal form||Low||Low||Good||Good||Very high|
Your attorney for all corporate entities
Your expert partners regarding all questions of German corporations and their foundation or restructuring are
- Attorney Phillipp von Raven and
- Attorney Thomas Schwab, Certified Specialist for Commercial and Corporate Law.
The easiest way to contact us is by email (email@example.com) or by phone (+49 (0)69 76 75 77 80). We are looking forward to hearing from you!