FAQs

Q?

Foundation Procedure

A.

1. Fill in the order Form
2. Preparation of the documents
3. Certification with the notary
4. Open a bank account and deposit of the payment into the nominal capital
5. Entry at the trade register

Q?

LEGAL FORMS OF DOING BUSINESS IN GERMANY

A.

GmbH: Gesellschaft mit beschränkter Haftung (limited liability company)

UG (haftungsbeschränkt): The so called "Mini-GmbH" is the German version of a ltd.

GmbH & Co. KG: Limited liability company & Co. KG

UG & Co KG: Entrepreneurial company with limited liability & Co. KG, UG (haftungsbeschränkt) & Co. KG

AG: Stock corporation (Aktiengesellschaft)

oHG: Open trading company (offene Handelsgesellschaft )

KG: Partnership (Kommanditgesellschaft)

e.V:  Registered association ("eingetragener Verein")

Q?

Information about UG (haftungsbeschränkt)

A.

Since November 1, 2008, a new form of the GmbH is available, the entrepreneurial company at limited liability (Unternehmergesellschaft (UG) haftungsbeschränkt). It is a simple version of a GmbH and can be founded with a capital of at least 1 euro. The incorporation is easier and cheaper than the incorporation of a GmbH.
In order to achieve the capital of a GmbH one day, the UG haftungsbeschränkt is legally required to set aside reserves of a fourth of the annual surplus. Having achieved the capital of a GmbH, it may apply for a change of name and legal form with the Register Court.

Q?

Information about GmbH

A.

The limited liability partnership (GmbH) is a legal entity in its own right. The required capital of a GmbH must total a minimum of 25,000 euro at the time of the establish­ment of the company due to liability reasons.

The minimum payment to found a GmbH is one quarter of each original capital share, provided these payments are made in cash and not in kind. The total sum, including the full value of all payments made in kind, must, nevertheless, be at least half of the minimum capital requirement (=12,500 euro). Failure to pay the nominal capital amount will in no way reduce the liability of the individual. As individuals, part­ners are not directly liable to the company creditors and, therefore, risk only the loss of their original contribution.

The GmbH is judicially and non-judicially represented by its managing director(s) (Geschäftsführer). These individuals need not reside in the Federal Republic and may, though they are not required to, be partners of the company. The directors are to be appointed and dismissed by the corporation meeting of the partners and are to be listed in the Commercial Register.
All business correspondences and letterhead must contain certain information about the company including the firm (= name of the company), the legal form of the com­pany, the location and court of registration, its registration number in the Commercial Register, and the first and surname(s) of the managing director(s).

Q?

Information about Joint-Stock Company (Aktiengesellschaft, AG)

A.

A joint-stock company (AG) is a legal entity in its own right. The minimum capital which is 50,000 euro consists either of par value shares having a minimum value of 1 euro per share or of no-par value shares.

An AG can be founded by one single individual. All individuals, including legal enti­ties, may be members of an AG. It is to be both judicially and non-judicially repre­sented by the management board, which may consist of one or more persons ap­pointed by the supervisory board. The supervisory board must consist of at least three members. For larger joint-stock companies (AG) other regulations determine the minimum number comprising the supervisory board. The main duty of the super­visory board is to supervise the business management of the manager or manage­ment board. Like the business correspondences and letterhead of a GmbH, those of an AG must contain certain information: the firm, the legal form of the company, the location and court of registration, its registration number in the Commercial Register, the first and surname(s) of all members of the management board and the first and surname of the chairman of the supervisory board.

Information regarding the establishment and costs associated with the establishment can be obtained from the Chamber of Industry and Commerce.

Q?

Information about General Partnership (Offene Handelsgesellschaft, OHG)

A.

A general partnership (OHG) must consist of at least two partners. No limit is placed on the liability of each partner. Legal entities may also be members of an OHG, re­gardless of whether they were established under German or foreign law (comparable to a GmbH).

In principle, the right to represent the general partnership (OHG) as a whole, may be exercised individually by all partners. The joint representation of the partnership by several partners or the exclusion of individual partners from representing the part­nership, however, can be specified in the memorandum of association. All business correspondences and the letterhead must state the firm, the legal form and the location of the partnership, the court of registry, as well as the registration number.

In the event that all partners in an OHG are legal entities and, hence, their liability is automatically limited, reference must be made to this by an appropriate supplement to the company name (e.g. ”GmbH & Co. OHG–).
In addition, all business correspon­dences of partnerships of this type must also contain the business names of the partners (Firma) and their court of registration as well as the number under which the firm is listed in the Commercial Register.

Q?

Limited Partnership (Kommanditgesellschaft, KG)

A.

In a limited partnership (KG), at least two partners are necessary, one of which must have unlimited liability (Komplementär) and one of the limited partners must have liability not exceeding the value of his/her shares in the company (Kommanditist). The amount of liability is not fixed by law. Legal entities, regardless of whether they are established under German or foreign law (see GmbH below), may also be partners in a KG. In the situation where the only partner with unlimited liability of a KG is required to have limited liability, indications to this must be made by an appropriate supplement to the company–s name, such as the com­monly used ”GmbH & Co. KG–. All business transactions and correspondences of limited partnerships (KG) must contain the same information as the correspondences of general partnerships.

As a general rule, the right to represent the company is held by the partners with unlimited liability (Komplementäre) only.