Forms of Nonprofit Corporations in Germany

Comparison of the most relevant legal forms of nonprofit organizations

Forms of Nonprofit Corporations in Germany

In Germany, various legal entities can acquire the status of a nonprofit corporation:

  • Corporate enterprises (especially gAG and gGmbH),
  • Cooperative societies
  • Associations (registered and non-registered),
  • Foundations (with and without legal capacity) as well as
  • Commercial businesses of a legal entity under public law.

We would like to briefly introduce the four most common legal forms for nonprofits in Germany, which are nonprofit entrepreneurial company (gUG), nonprofit limited liability company (gGmbH), association (e.V.) and foundation (Stiftung) and clarify the most important questions in a quick and simple manner:

  • How many persons does the incorporation require?
  • Who holds the power of representation?
  • Is it possible to change the articles of association or the purpose later on?
  • Is it required to provide an annual balance sheet?

Overview of all relevant facts:

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Nonprofit entrepreneurial company (gUG) Association (e.V.) Nonprofit LLC (gGmbH) Foundation
Number of persons required Min. 1 Min. 7 Min. 1 Min. 1
Number of managing directors (UG/GmbH) or board members (association/foundation) Any (min. 1) Any (min. 1) Any (min. 1) Any (min. 1)
Controlling body Optional Optional Optional Optional
Capital stock Min. EUR 1 capital stock EUR 0 Min. EUR 25,000 capital stock Min. EUR 100,000 capital stock
Payment of assets upon foundation Full payment upon foundation - ¼ of each share, min. EUR 12,500 in total Full payment after approval
Liability Limited to company assets Limited to assets of association Limited to company assets Limited to assets of foundation
Non-cash establishment No No Possible Possible
Possibility of exempting the managing directors from the ban on self-contracting Yes Yes Yes Yes
Authorization to represent (in principle) Managing director Board of directors Managing director Board of directors
Flexibility in ongoing operations Flexible Flexible Flexible Less flexible, as committed to founder's will
Options in arranging the statutes Largely free Largely free Largely free Largely free
Reputation/prestige of the legal form Low High High Very high
Possibility of economic activity (within the framework of what's permissible under nonprofit law) Yes Yes Yes Yes
Democratic basic order No Yes No No
Change of partners/members Complicated (transfer of business shares requires certification by notary) Simple (entry/exit by written declaration) Complicated (transfer of business shares requires certification by notary) No members
Later amendments to the statutes Possible, but requires certification by notary Possible Possible, but requires certification by notary Only possible in exceptional cases
Change of purpose at a later time Possible Possible Possible Only possible in exceptional cases
Running expenses Higher (mandatory accounting) Moderate Higher (mandatory accounting) Moderate
Governmental supervision Low Very low Low High

With our team of several experienced attorneys, legal specialists and tax consultants, we provide legal counsel to charitable organizations and nonprofit organizations in the third sector nationwide. We advise you in all legal and tax matters and support companies, private individuals and associations as well as the public sector when it comes to the establishment and restructuring of nonprofit organizations.

Your attorney for nonprofit corporations

Your attorney for nonprofit corporations in Germany

Your expert partners regarding all questions of German nonprofit legal forms and nonprofit law are

The easiest way to contact us is by email (info@winheller.com) or by phone (+49 (0)69 76 75 77 80).

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