Forms of Nonprofit Organizations in Germany

Comparison of the most relevant legal forms of nonprofit organizations

In Germany, various legal entities can acquire the status of a nonprofit and tax-exempt organization:

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

We would like to briefly introduce the four most common legal forms for nonprofit and tax-exempt organizations in Germany which are the charitable entrepreneurial company (gUG), the charitable limited liability company (gGmbH), the association (e.V.), and the foundation (Stiftung), and answer some important questions which are for example:

  • How many persons are needed for incorporating the organization?
  • Who is authorized to represent the organization?
  • Are foreign shareholders / members admissible?
  • Is it possible to change the statutes or the purpose later on?

Overview of all relevant facts:

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Charitable entrepreneurial company (gUG) Association (e.V.) Charitable LLC (gGmbH) Foundation
Number of persons required Min. 1 Min. 7 Min. 1 Min. 1
Foreign shareholders/members admissible? Yes Yes Yes n/a
Number of managing directors (UG/GmbH) or board members (association/foundation) Any (min. 1) Any (min. 1) Any (min. 1) Any (min. 1)
Foreign managing director/board member admissible? Yes Yes Yes Yes
Controlling body Optional Optional Optional Optional
Capital stock Min. EUR 1 capital stock EUR 0 Min. EUR 25,000 capital stock Min. EUR 200,000 capital stock advisable
Payment of assets upon incorporation Full payment upon incorporation - ¼ of each share, min. EUR 12,500 in total Full payment after approval by foundation authority
Liability Limited to company assets Limited to assets of association Limited to company assets Limited to assets of foundation
Non-cash establishment No n/a Possible Possible
Possibility of exempting the managing directors from the ban on self-contracting Yes Yes Yes Yes
Authorization to represent (unless otherwise provided in the statutes) 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 drafting 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
Change of shareholders/members Transfer of business shares requires certification by notary public Simple (entry/exit by written declaration) Transfer of business shares requires certification by notary public n/a
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 balance sheet accounting) Moderate Higher (mandatory balance sheet accounting) Moderate
Governmental supervision Low Very low Low High

Your attorney for German nonprofit organizations

You would like to set up a nonprofit organization in Germany and need advice on this? Are you looking for an advisor who helps you establish your organization in Germany? You would like to have the widest possible influence on the newly set-up organization in Germany?

We are delighted to assist. With our team of experienced attorneys and tax advisors, we provide legal counsel to charitable organizations and nonprofit organizations in the third sector nationwide. We also advise German and international companies, high net-worth individuals and nonprofit organizations as well as the public sector from within Germany and from abroad when it comes to the establishment and restructuring of nonprofit organizations based in Germany.

Please feel free to contact us: Attorney Uwe Müller and Attorney and Certified Foundation Consultant Alexander Vielwerth are happy to assist you. The easiest way to reach us is by e-mail (info@winheller.com) or by phone (+49 (0)69 76 75 77 80).

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