Limited Liability Entrepreneurial Company
Thanks to a law reform enacted in 2008 founding a corporation in Germany, or shifting a sole proprietorship to a corporation, is now simpler and less expensive. An Unternehmergesellschaft (UG), commonly known as a “mini-GmbH”, can be established with capital of only one euro, or any other amount up to the €25,000 needed for a regular corporation (Gesellschaft mit beschränkter Haftung, GmbH). International investors are finding the low investment an advantage in their plan to develop and grow a business in Germany and Greater Europe.
Registration conditions
Company registration has requirements that can be seen below.
Timeline
There are no restrictions on the name given to a mini GmbH, provided that the name: clearly distinguishes the GmbH from other businesses in the same location, is not misleading, and contains a reference to its limited liability. The name must be approved by the Chamber of Industry and Commerce, and must end with “GmbH”.
Shareholders
The minimum of number of shareholder is one in a GmbH company. The shareholder(s) may be of any citizenship and may or may not be a business entity.
Share Capital
The share capital should be to at least 1 euro. Only cash contributions are allowed, contributions in kind are prohibited. Also, the minimum share capital have to be paid in full prior to the application for entry in the commercial register.
Directors
A GmbH is controlled and legally represented by its conduct directors. There should be at least one managing director (who does not have to be a shareholder or a German resident), however the director has to be an individual. Business entities are not admissible as managing directors. The shareholders may exercise a direct effect the management of the GmbH, by issuing binding requests or directions to the managing directors .
Legal address
All GmbH businesses must have their statutory registered office in Germany. The administrative registered office however can be located outside of Germany.
Timeline
Incorporating a new company usually takes two to three weeks. The Company may trade once a bank account is opened and the share capital is paid.
Tax
All profits deriving from German business entities irrespective of form, are subject to a corporate income tax of 15% and solidarity surcharge, at a rate of 5.5% of the corporate income tax that is levied by the federal government, and also to the trade tax which is required by municipalities.
Other forms of taxation that a German legal entity may be subject to are the value added tax, and the tax on wages. In Germany the limited liability company may be subject to payroll taxes as an employer. German accounting rules apply to legal entities with business activities in Germany, and are subject to the German Commercial Code (Handelsgesetzbuch – HGB) – a code law system. Assets and income shall not be overstated and liabilities and charges must not be understated. A turnover tax ranging from 7-19 % may be applied and Trade tax varies according to municipality. Solidarity surcharge is also applicable.
Audit and financial returns
Legal regulations regarding accounting and audit in the Federal Republic of Germany, comply with the legislation of the European Community. All legal business entities are obliged to prepare annual financial statements and file these with the German Federal Gazette. Full financial statements covering a balance sheet, an income statement, and explanatory notes to the financial statements. Medium and large sized corporations and LLPs are also obliged to prepare and file a management report. Small and medium-sized companies/LLPs have a choice to file abbreviated financial statements with the Federal Gazette.
Consultation about Limited Liability Entrepreneurial Company registration
Our consultation services for Limited Liability Entrepreneurial Company registration are intended to assist you in every aspect of setting up your business in Germany. From preparing initial documents to securing essential permits and registrations, our knowledgeable advisors facilitate a seamless and effective process. We offer tailored advice on legal obligations, share capital, and corporate structure, enabling you to make informed choices that align with your business objectives.
Ownership management
Overseeing the ownership of a Limited Liability Entrepreneurial Company is a complex yet essential responsibility. Our services encompass managing alterations in ownership, overseeing beneficial owners, and facilitating ownership transfers. We guarantee that all changes in ownership are accurately recorded and adhere to current regulations.
Corporate structure changes
As your business develops, your corporate structure may also need to adapt. If you require changes in directors, updates to nominee details, or any other structural modifications, we offer a wide range of services to ensure these transitions occur smoothly and efficiently.
Share capital management
Effective management of share capital is essential for the financial well-being of your company. We provide services that assist you in increasing, decreasing, selling, and transferring share capital, guaranteeing that all transactions are executed precisely and comply with legal standards.
Register Limited Liability Entrepreneurial Company
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