In November 2008 the Act on the Modernization of the German Limited Liability Company Law and the Combating of Malpractice (Gesetz zur Modernisierung des GmbH-Rechts und zur Bekämpfung von Missbräuchen, MoMiG) was enabled in order to ease the incorporation process, to consolidate international popularity and to prevent the abusive usage of the German limited liability company (GmbH).
This law also enabled the creation of a Unternehmergesellschaft (haftungsbeschränkt, Entrepreneurial Company with limited liability or UG (haftungsbeschränkt) that requires a minimum share capital of one euro. The UG was enabled to facilitate the conversion of a UG into a GmbH later.
The German GmbH is a legal entity that benefits from rights and duties separate from the shareholders’ rights and duties. It can own assets, movable and immovable property. The GmbH in Germany requires at least one shareholder and a start-up share capital of 25,000 euros, while the nominal value of a share must be 1 euro. The capital contribution may be in cash or in kind. In case the share contribution is maid in cash, half of it must be paid before the registration, while the contribution in kind must be made in full. The liability for the company’s business activities is limited at the GmbH’s assets and not the shareholders’.
In order to found a GmbH in Germany the following steps must be established:
All the shareholders must sign the Articles of Incorporation of the GmbH and then notarize them. The Articles of Incorporation must contain the following data:
After the capital contribution has been paid, the German company may apply for registration with the local Commercial Register. The documents to be provided for registration are:
After the registration with the Commercial Register, the company must also register the business with the Local Regulatory Office (Amt für öffentliche Ordnung) or with the Mayor’s Office (Bürgermeisteramt).