A German charitable limited liability company (gemeinnützige GmbH, gGmbH) offers many advantages, especially in terms of taxation. However, it must comply with numerous requirements of the German law on nonprofit organizations. When founding a gGmbH, serious mistakes can therefore occur, which might later lead to the loss of its charitable tax-exempt status.
The charitable LLC is not an independent legal form, but a regular commercial GmbH. However, it differs from the commercial GmbH above all in its objectives.
The formation of a charitable LLC in Germany is therefore largely similar to the formation of a commercial LLC:
During the incorporation process of a charitable limited liability company, particularities arise mainly with regard to the statutes. These must comply with the requirements of German nonprofit tax law. The basic prerequisite for the recognition of the charitable status is the inclusion of a tax-privileged purpose in the statutes. The law distinguishes between charitable, religious and benevolent purposes. In addition, it must be determined in what specific way this purpose is to be achieved.
In Germany, when drafting the statutes, also the principles of exclusivity, immediacy and selflessness must be observed:
If the managing director is to receive a comparatively high salary, it is also advisable to get the salary assessed and to prepare a so called salary report at an early stage. Managing directors of charitable LLCs may not receive an unreasonably high remuneration, if the tax-exempt character of the company is not to be jeopardized.
In order to support you in founding a German charitable LLC, we prepared three different packages. We offer all of the following services in English or German.
Includes all services of the Basic Package, as well as:
Includes all services of the Basic Package and the Founder Package, as well as
No package fits your needs? Your case is so individual that we cannot provide optimal coverage with our package offers? We are as individual and flexible as you need us to be: Of course, you are more than welcome to book us at our usual hourly rates right from the start in order to book individual services. Just get in touch with us!
There are some alternatives to the charitable LLC: For larger projects the charitable stock corporation (gAG) is a suitable option, whereas for small start-ups the charitable entrepreneurial company (gUG) may be of interest. The latter can already be established with a share capital of only EUR 1. For certain projects the charitable cooperative (Genossenschaft) could also be taken into consideration.
The nationwide incorporation of charitable LLCs in Germany is part of our daily work. We would be pleased to support you fully in setting up your charitable GmbH, e.g. by:
Once the gGmbH has been founded, we will continue to be there for you: Our tax department will be happy to take care of the LLC's tax registration and ongoing accounting. And our legal team will draw up all individual contracts for you and your charitable LLC: Managing director service agreements, complex license agreements, tax-optimized sponsoring contracts as well as cooperation agreements with your domestic or foreign partner institutions - all of course individually tailored to your charitable LLC's needs.
You would like to establish a charitable LLC or receive advice from an experienced attorney on the law and taxation of German nonprofit LLCs? Your expert partner for the establishment of charitable limited liability companies in Germany is attorney Johannes Fein. The easiest way to reach us is by e-mail (firstname.lastname@example.org) or by telephone (+49 69 76 75 77 80). We are here to assist.