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Setting Up a Mini GmbH in Germany

Setting Up a Mini GmbH in Germany

Updated on Wednesday 07th December 2016

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Setting-Up-a-Mini-GmbH-in-GermanyWhat is a German mini-GmbH?

The mini GmbH (Unternehmergesellschaft, UG) or limited liability entrepreneurial company is a sub-form of the regular German limited liability company or GmbH. The difference between the two types of companies is the share capital, meaning a German mini GmbH requires a minimum share capital of 1 euro, compared to the minimum share capital requirements of 25,000 euros for a GmbH. The mini GmbH is required, however, to compensate the lack of initial capital by setting aside a quarter of its annual profit until it accumulates the minimum share capital of a GmbH. When the amount is reached the mini GmbH will become a German GmbH. The mini GmbH will register with the German Companies Register only after it reached the full amount of the share capital.

How to set up a mini GmbH in Germany?

The mini GmbH is established the same way as the GmbH by a German notary. However, the procedure is much simpler, for a mini GmbH with a shareholder being sufficient to fill out a template contract. The founder must also produce the passport and proof and proof of submitting the minimum share capital. It must be noted that a German mini GmbH must have its share capital paid in cash, as a share capital paid in assets is not allowed.  Also, if the mini GmbH has more than one shareholder, it is advisable to draft a customized contract.

Below, investors can find out more details about the mini-GmbH in Germany

Once all the formalities have been completed, the notary will send the documentation to the Trade Register. Foreign investors setting up a mini GmbH may also set up a German virtual office where the certificate of incorporation will be sent.

In order to set up a mini GmbH it is recommended to ask the services of a law firm in Germany.

What are the advantages of German GmbHs?

Beside from the share capital requirements, establishing a mini GmbH in Germany also has many other advantages. Among these are the uncomplicated registration procedure and lower costs of incorporations. Also, the mini GmbH is a great alternative to the German sole trader as the liability of the founder will be limited to the company’s assets. In terms of taxation, German mini GmbHs are subject to the same taxes as any other companies.

For details about the costs of establishing a mini GmbH, please contact our German lawyers.

 

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