Setting up a Nonprofit LLC in Germany

As a law firm that specializes in setting up German Nonprofit LLCs (called gGmbH or gemeinnützige Gesellschaft mit beschränkter Haftung in German), we have gained considerable experience with all sorts of charitable companies. To best serve your needs, we will talk about your plans, draft an appropriate statute, conduct the required negotiations with German tax authorities and liaise with a notary and the German commercial register. We will also assist you after your German nonprofit LLC has been set up. We can help you with drafting and revising contracts of all sorts; license agreements, employment contracts for executives, as well as for employees, tax-optimized sponsoring contracts and contracts for domestic and international partner organizations – always suiting your individual situation and needs.

Individual steps

A German Nonprofit LLC is not an autonomous legal form, but mainly a GmbH (which is commonly used to start businesses across different industries). The biggest difference between a gGmbH ( the German Nonprofit LLC) and a regular GmbH is the former’s charitable focus.

The establishment of either is thus very similar:

You and your associates draft and sign a memorandum of association (which is often referred to as statute) and get it notarized. Through a shareholder resolution, shareholders will appoint the company’s director. The relation between the director and the company should be based on a sound employment contract. Although considered common practice by many, drafting and signing contracts is forgotten at times. After the shareholders have paid their initial contribution (of the 25.000 Euro share capital, at least half (12.500 Euro) have to be deposited), the Nonprofit LLC should be entered into the German commercial registry. This step is very important, because it brings the company into legal existence and thus minimizes liability for its shareholders.

Non-profit Requirements

One distinguishing factor of the gGmbH (compared with the GmbH) is its statute, which has to satisfy certain non-profit requirements. To obtain the status of a charitable company, its statute should contain a tax-privileged purpose. German law distinguishes between non-profit purposes, religious purposes and benevolent purposes. It should also be determined in what concrete manner those purposes will be achieved.
When designing the statute, you should take selflessness, exclusivity and immediacy (as presented in the following paragraph) as most important factors into consideration:

According to the decree of exclusivity, the organization shall only pursue the goals defined in its statute. If additional goals will be added, the statute ought to be amended. The precept of immediacy requires the gGmbH to personally pursue its goals. This should be mentioned and described in the statute. However, a gGmbH may also act just in a promoting manner; according exceptions from the immediacy precept are described in German nonprofit law. The selflessness requires the gGmbH to act benevolent. Especially important for the gGmbH as corporation is the idea of asset commitment. The company’s funds should only be spend for benevolent purposes; payments to stockholders or other advantages for stockholders are not allowed. Thus, a well defined statute can be of great help.

When establishing a gGmbH, contacting the Finanzamt (German finance authority) can help to ensure that the statute satisfies all benevolent requirements (and will thus be recognized as a nonprofit organization). If the director is supposed to obtain a comparatively high remuneration, it can be a good idea to obtain a salary assessment early on. Directors of gGmbhs are not allowed to obtain inadequately high salaries. If they do, the company may loose its nonprofit status.

gGmbH Alternatives

In addition to the gGmbH, you may establish other companies to pursue a charitable goal. If you have big plans, a gemeinützige AG (gAG, nonprofit stock corporation) might be suitable; a gemeinnützige Unternehmergesellschaft (gUG, nonprofit entrepreneurial company, requires an investment of just 1 Euro)  may be appropriate for social entrepreneurs with less capital at hand. Another alternative would be the nonprofit cooperative.

Your Experts for Nonprofit Legal Advice

Attorney Johannes Fein (Certified Specialist for Tax Law) and Attorney Thomas Schwab (Certified Specialist for Commercial and Corporate Law) are looking forward to helping you with any questions regarding the setting up of a charitable organization in Germany. You can contact them via e-mail ( or by phone (+49 (0)69 -76757780).


1597423641 > 1601416800

WINHELLER is represented by two lawyers in the 2021 Best Lawyers Ranking.



1597423641 >

Advising the nonprofit foundation (Germany's first crypto foundation) on its establishment as a hybrid foundation and equipping it with IOTA tokens.




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