Limited Liability Company in Germany
Foreign businesses may establish their German operations as companies, partnerships, or branches of the parent body. The most used company form in Germany is the Limited Liability Company. This legal form is favoured for its simple and flexible corporate and financial structure. The liability of shareholders is limited to the LLC share capital.
LLC registration conditions
Company registration has requirements that can be seen below.
Share capital
The minimum share capital of a GmbH (LLC) is EUR 25.000,00, and it is payable in cash or increase in kind. Only 25% of the share capital has to be paid in upon establishment. On registration, each shareholder receives a single share in the share’s amount capital he holds. If contributions in kind should be made, both the object of the contribution in kind and the amount of the share, to which the contribution referrers must be fixed in the contract.
A LLC does not issue share certificates, and its shares are not openly transferable. Shares may be transferred to another shareholder or a third party by appointment. The contract of assignment requires a notarized arrangement in order to be effective. Apart from any restrictions that may be laid down in the articles of association, shareholders have the right of initial refusal before a shareholder may transfer his interest to an outside party.
Shareholders
For incorporation of a LLC there must be at least one shareholder. Any additional people can take part at the constitutive act. Possible partners are both natural and legal persons, and other incorporated entities. The corporation requires a company agreement which must include at least the firm, headquarters and business purpose of the GmbH, and the amount of share capital and the acquisition of capital contributions by its shareholders.
The supreme and deciding authority of the LLC is the shareholders’ meeting in which they represent the entirety of the shareholders. Its competence covers all matters of the company, unless the LLC Act or the articles of association provide otherwise. In these meetings the shareholders adopt decisions. If a resolution is adopted unanimously, the shareholders may waive any formal conditions provided that stricter requirements are not specifically required by statute or the LLCs articles of association.
In the absence of specific majority requirements set out by statute or in the company’s articles of association, a simple majority is required to pass the shareholders’ resolutions. Nevertheless, certain decisions require a majority of at least 75 % of the votes cast. This is necessary for e.g. amendments to the articles of association, capital increases or decreases, mergers etc.
The liability of the shareholders is limited to the paid-up capital. The limitation of the shareholders’ liability becomes effective only upon registration of the GmbH in the Commercial Registry. The personal assets of the shareholders are not involved in the responsibility of the company. For losses from ordinary business activities of a GmbH, the shareholders are liable only if they caused these losses in an unlawful failure.
Fees
Registration costs for filing with the Commercial Registry for a GmbH is currently 400 Euro. Also, there are fees for the notary and for the district court for entry and publication in the Federal Gazette.
Compulsory regulation
All quoted businesses in Germany, that means those with stock or capital market listing, and other “public interest entities” must follow the German Code of Corporate Governance issued by the Federal Ministry of Justice. The Code is intended to make the rules applicable to corporate management and supervision transparent for national and international entrepreneurs in order to strengthen their trust in the corporate management of German enterprises.
Documents
Get together necessary documents for the notary appointment. Registrant need:
- Articles of association
- Shareholder’s list
- Founding documents needed to open a bank account
Consultation about Limited Liability Company registration
Our consultation services for setting up a Limited Liability Company in Germany are intended to assist you at each stage of the process. Our experienced advisors will help you with everything from filling out the initial paperwork to securing the required permits and registrations, ensuring a seamless and effective process. We offer tailored advice on legal obligations, share capital, and company structure to enable you to make well-informed decisions that are in line with your business objectives.
Ownership management
Managing ownership in a Limited Liability Company can be challenging, yet it is essential. Our services involve dealing with ownership adjustments, supervising beneficial owners, and monitoring ownership transfers. We guarantee that all ownership modifications are accurately recorded and adhere to current regulations.
Corporate structure changes
As your company grows, your corporate structure may also need to change. If you require modifications such as altering directors, updating nominee details, or making other structural adjustments, we offer thorough services to help manage these changes seamlessly and effectively.
Share capital management
Managing share capital is crucial for the financial well-being of your company. Our services can assist you in enhancing, decreasing, divesting, and transferring share capital, guaranteeing precise and legally compliant transactions.
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