Can be installed Company Types in Germany What are they?
There are 3 types of companies that can be established in Germany. These types are called by their short names AG, UG and GmbH. You can establish and activate the company that suits your needs.
UG (haftungsbeschränkt) – or limited liability entrepreneurial company in English – was created by the German government as a special form of GmbH for entrepreneurs with only a small amount of capital at their disposal. Only 1 € capital is sufficient to set up a UG company. For this reason, it is often referred to as ‘Mini-GmbH’, ‘small GmbH’ or ‘1-euro-GmbH’ in Germany. However, it is recommended that the company have a capital of 1000€ in order to complete its corporate transactions and cover expenses such as rent and accounting.
GmbH (Gesellschaft mit beschränkter Haftung) , Limited liability company means ‘limited company’ in English. The key feature of GmbH is its limited liability – shareholders cannot be held liable for damages to their private assets, meaning that a person’s financial liability is limited to a certain amount. In the case of GmbH, liability is limited to a shareholder’s capital contribution. Limited liability for a GmbH means that the company is liable for damages only with the company assets and not with the private assets of the individual shareholders. Calculating the financial risk for the shareholders is much easier because they are only liable for the amount of capital registered in the GmbH’s articles of association. The founding capital of the GmbH is 25.000€.
AG is short for Aktiengesellschaft, a German term for a public limited company. Such company shares may be offered to the public and are traded on a public exchange. Shareholders’ liability is limited to their investments. Shareholders are not liable for the debts of the company and its assets are protected if the company goes bankrupt. The founding capital of the AG company is 50,000 €.
Types of Company in Germany
UG and GmbH Company Comparison
UG and GmbH are independent companies with individual shareholders. In this case, most of the responsibility lies with the company itself, not the shareholders. The company enters into contracts, may own assets, and is liable for taxes. Limited liability of shareholders means that it is limited to the legal assets of the company, including its capital. The shareholders of UG and GmbH are not personally liable unless fraud is committed.
Shareholders can be German or foreign natural or legal persons for both companies. There is no requirement to have more than one shareholder. GmbH and UG must be represented by the general manager(s). The general manager(s) may also be a shareholder or company employee or a third party from outside the company. It is not necessary for the Managing Director to be a German citizen. If the general manager of the company manages the company from abroad, he must have a business visa that will allow easy entry into the country.