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 of business 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
Our experts regarding all questions about legal forms of companies in Germany and their foundation or restructuring are happy to assist you.
The easiest way to contact us is by e-mail (info@winheller.com) or by phone (+49 69 76 75 77 85 34). We are looking forward to hearing from you!
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