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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 (info@winheller.com) or by phone (+49 (0)69 76 75 77 80). We are looking forward to hearing from you!
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