German Charitable Stock Corporation

The charitable stock corporation – Ideal legal form for large projects in Germany

The charitable stock corporation (gemeinnützige AG, gAG) is still quite rare in Germany, but the number of newly founded charitable AGs is constantly increasing. And there is a good reason for this: the legal form of the nonprofit AG is just as suitable for well-funded large-scale projects as is the case in the commercial sector.

Advantages of a charitable stock corporation

From a legal point of view, the charitable AG has no need to hide: It can, for example, perfectly be used as a holding company in larger nonprofit structures. In addition, good corporate governance can be achieved through clear responsibilities of the executive board, supervisory board and the general assembly. This also plays a considerable role in terms of legal and tax compliance.

The advantages of a charitable stock corporation compared to a charitable LLC are evident in

  • the easy transferability of company shares,
  • the fact that the executive board is not bound by any directives (which can also be a disadvantage, specifically for foreign shareholders),
  • an obligatory and strong supervisory board, which is particularly important in the third sector,
  • and the increased creditworthiness due to the higher share capital of EUR 50,000.

However, the advantages of a charitable AG are not only of legal nature. Common values and objectives of the shareholders can be focused within a charitable stock corporation and transported to the outside world as a common value base. By issuing shares, the charitable AG is also attractive for fundraising and participation reasons.

Prominent charitable AGs in Germany

In practice, the legal form of a charitable stock corporation is far too infrequently included in the structuring considerations. And quite undeservedly so: The charitable AG can be just as beneficial as other nonprofit entities. For instance, did you know that the Zoological Garden in Berlin has been a charitable stock corporation since the middle of the 19th century? Of course not all charitable stock corporations have such an impressively long tradition.

Just a few examples of newly founded, but no less successful contemporary charitable AGs are

  • the company gut.org gemeinnützige AG, which operates the well-known donation platform betterplace.org1,
  • the PHINEO2 gemeinnützige AG, which strengthens civil society through comprehensive analysis and consulting services,
  • and the health care group AGAPLESION3 gAG.

As you can see: With a charitable stock corporation, you are in good company.

Foundation of a charitable stock corporation

We will be happy to work out with you whether the charitable AG is also suitable for your project and will gladly take care of your charitable project in Germany. We offer comprehensive knowledge of both corporate and stock corporation law as well as nonprofit (tax) law and will guide you safely and expertly throughout the entire incorporation process. Of course, once the charitable stock corporation has been founded, it does not end there: We are happy to be the first point of contact for your charitable corporation regarding all legal and tax issues, including accounting and tax advice.

Your attorney for German charitable stock corporations

Are you interested in the charitable AG as a legal form? Your contact persons are Attorney Uwe Müller and Attorney and Certified Foundation Consultant Alexander Vielwerth. The easiest way to reach us is by e-mail (info@winheller.com) or by phone (+49 (0)69 76 75 77 80). Please feel free to contact us so that we can arrange an appointment to discuss your individual needs.


[1] betterplace is a trademark of gut.org gemeinnützige AG.
[2] PHINEO is a trademark of PHINEO gemeinnützige AG.
[3] Agaplesion is a trademark of Agaplesion gAG.

News

1603977262 > 1607036400

The successful handbook "Entire Nonprofit Law" has been published by Nomos Verlag.

More

Contact

Contact

Awards

Juve AwardLegal 500 Germany 2019
azur100: Top Employer for Lawyers 2018