German companies are divided in private partnerships and corporations. All the types of companies have their advantages and disadvantages. Some are good for small-business, the others are better for mean and big business. The tax treatment of companies is different as well. Take our legal advice in a one-on- one interview. We show you the right form for your business according to your individual requirements.
Established forms of companies:
The GmbH is a company with limited liability. The minimum capital fund for GmbH is 25.000 Euro. The liability of shareholders is limited by the amount of the capital fund. For the foundation of the GmbH you should pay even 12.500 Euro from the capital fund on the account of the company. Shareholder of GmbH could be natural persons and legal person; the foreign companies could be shareholder as well.
This company is qualified for mean and big business and has good reputation in Germany and Greater Europe.
The Mini-GmbH is a “Sub-form” of the regular GmbH and was created by German authority in 2008. In some way the Mini-GmbH is like British Limited.
This company is qualified for startups and also called UG (German abbreviation for: limited liability). The main difference to the regular GmbH is the amount of the capital fund. The capital fund for UG is at least 1 Euro. The Mini-GmbH must accumulate 25% of its yearly earnings as legal reserve until it reaches 25.000 Euro. If the capital stock of 25.000 Euro has been reached, the Mini GmbH can be converted to a regular GmbH.
The AG is also corporation like GmbH. This one is qualified for mean and big business. The capital fund for AG is 50.000 Euro. For the foundation of AG should be paid 25.000 Euro on the account of the AG. The AG has three legal organs: management board (Vorstand), supervisory board (Aufsichtsrat) and annual general meeting (Hauptversammlung). The management board runs the company. The supervisory board controls the management board and elect the members of management board. The annual general meeting consists of the shareholders and elects the member of supervisory board. The main task of the annual general meeting is to appoint the main orientation of the AG; fullparticulars are defined by German stock corporation law).
The OHG is a general partnership. Shareholder could be natural and legal persons, who want to start trading activities. For the incorporation of OHG are at least two persons needed. The name of the company must contain „offene Handelsgesellschaft“ (General Partnership); short OHG. There is no requirement for capital fund. The liability of the shareholder is unlimited.
The KG is also partnership like OHG. The main difference to OHG is the liability of the shareholder. Not less than one shareholder has unlimited liability and called Komplementär (the general partner). The other shareholder called Kommanditist (the limited partner), whose liability extends only to his or her nominal holdings in the company. The limited partner has only limited control and influence on the company policy.
6. Zweigniederlassung / Tochtergesellschaft / unselbständige Niederlassung
( Independent Branch / Subsidiary / Dependent Branch)
The independent branch is economical independent from the main office. The independent branch is separated to the main office and hat its own legal entity. It must be registered at the local trade office and is able to do the same business like the main office. The subsidiary is independent by law. It will controlled by the parent company. The subsidiary is dependent economically on the parent company. The legal relation to the parent company is regulated by contracts.