Lawyer Germany
Sunday, 16. February 2020

German AG

AG in Germany

In Germany the GmbH is the common kind of company for any serious business. For every German company it is very important to know with whom to do business. If there is a GmbH as a possible partner it is a big reason for a serious partner. The German GmbH is called "Gesellschaft mit beschränkter Haftung" translated: society with liability limited.

The system of GmbH is exactly defined in the GmbHG, in the law of the limited society. The German GmbH is represented by one or more "Geschäftsführer/n" in English called "CEO", "Company Manager" or "Manager Director".

CEO of a German AG

The GmbH and the Geschäftsführer are subject to many rules, written in the GmbH-law. The CEO is responsible for the operative business. The CEO just represent the GmbH. The GmbH is a fully autonomously legal person.

If the GmbH is insolvent, the CEO is neither liable nor deptor. The only risk for the CEO is to file for insolvency in time. If he is doing not, he is liable for everey business done after this point of time.

The CEO has to do business in accordance with the requirements of the shareholders of the German GmbH and the German laws. If he is doing business for his own advantage and in the case the CEO is deceiving, he is liable for his own conduct or acts.

shareholders of a German G

The German GmbH is suitable for one or a few shareholders. The shareholders has to come together at least once a year. They are able to terminate the agreement with the CEO and to amending the articles of the GmbH.

The risk of a AG in Germany

The above mentioned describes also the only risk with a GmbH. Every business man in Germany is able to build up a German GmbH, make some business without paying the suppliers, pay itself a top salary and to file for insolvency. To avoid this risk, you have to get informations about a GmbH before you sign a contract with it.

The German AG

The GmbH is the little sister of the German AG. The AG is the "Aktiengesellschaft" translated "stock company". The AG is good if you have a lot of company participants. The AG is able to be listed on a stock exchange.

Tax advices

In Germany there are two reasons to formate a GmbH. On the on hand the limitation of liability and on the other hand the tax advantages. A GmbH is helping with many possibilities to safe taxes. But a Germany GmbH has to pay business tax (Gewerbesteuer) and there is mostly no way to get this business tax back. So many shareholders of a GmbH formate a GmbH & Co.KG additionaly. A GmbH & Co.KG has to pay business tax, but the owner of the GmbH & Co.KG is able to get the tax back.

general publishing requirements

In Germany a GmbH subject to certain publishing obligations. The annual financial statements of the German GmbH has to be published at the German Federal Gazette (Bundesanzeiger). Everybody is able to have a look to the German Federal Gazette and is able to get an overview of the financial situation of a German GmbH.

Every transfer of the GmbH headquarter, every changing in the management and every shareholder change has to be published in the commercial register (Handelsregister). Everybody is able to inform himself about the actual adress of the German GmbH, about the shareholders and the management via the commercial register. Both, the German Federal Gazette and the commercial register can always be viewed on the internet free of charge and without registration.

Formation an AG GmbH

In Germany a GmbH will be formated with the help of a notary. You need a new bank account and the amount of EUR 12.500. The law prescribes the amount of EUR 25.000, but the half of the amount has to be at least to be transfered to the new account, if this is declared in the GmbH contract.

If a particiant or the only owner of the GmbH is from abroad, the notary needs a actual certified excerpt from the Register, not older than 4 months and stamped with an apostille.

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