Legal Forms of Corporations in Germany

Name: WINHELLER Rechtsanwaltsgesellschaft mbH
Address: Friedrich-Ebert-Anlage 37, Frankfurt am Main, Hessen, 60327
Telephone: 069 76757780
Price range: $$
Rating: 4,5

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