In this article, our colleague from Gurcan Düsseldorf Office, Att. Hülya Oruç will mention Company Registration in Germany with all the required steps and processes.
LIMITED LIABILITY COMPANY (SO-CALLED GMBH)
WHAT IS GmbH?
A Gesellschaft mit beschränkter Haftung (GmbH) is the best-known form of corporations in Germany. With more than 1 million registered companies, the formerly popular partnerships are overtaken now by this form of company (as of 2013).
The GmbH is a legal entity that has its own rights and obligations. In consequence, the GmbH is an independent legal personality, e.g. it can sue and be sued independently from the shareholders. The GmbH itself can be the owner of movable properties.
BODIES OF THE GmbH ARE:
- The managing director,
- The shareholders
- The meeting of the shareholders.
Further, under certain circumstances, a board of directors can be appointed.
HOW CAN I INCORPORATE GmbH IN GERMANY?
Company Formation in Germany might look an easy process. However, incorporation has several steps until your company able to make invoices.
The formation of a GmbH is not bound to a certain number of shareholders.
Even one shareholder can found a GmbH.
WHAT IS THE MEANING OF VORGRÜNDUNGSGESELLSCHAFT?
The GmbH is born with the registration in the commercial registry. Before the registration into the commercial registry, it is a so-called ”Vorgründungsgesellschaft“ (Association before Formation) in the form of a BGB company (Company organized under the German civil code) which has the purpose of formation of a GmbH.
With the notarization of the AoA, the so-called Vor-GmbH (before GmbH) comes into existence. It may also – like the Vorgründungsgesellschaft – be the bearer of rights and obligations, but then the suffix “i.G.” should be used to make it clear that the GmbH has not been registered yet in the commercial register.
With the registration to the commercial register, the GmbH is ”born“. The GmbH’s purpose can be any legally permitted purpose.
HOW MUCH IS THE MINIMUM SHARE CAPITAL OF THE GmbH?
The share capital of a GmbH must amount at least EUR 25.000,00.
According to § 7 GmbH-Law half of the share capital has to be contributed when the notary applies for registration at the commercial register. The company has the obligation to hold the minimum share capital. This capital can be provided in cash or kind.
Upon the registration of the company, the managing director must assure that the minimum regular share capital has been paid. The GmbH is represented by one or more managing directors who can be appointed indefinitely or for a certain time by the shareholders in the AoA with the formation or afterward.
Managing directors can only be natural persons, who are absolutely Sui Juris (unlimited legal capacity). Managing directors are subject to special and due diligence requirements that have to be met, amended by responsibilities developed by case law.
The GmbH is liable only with its own assets, the shareholders are exempt from personal liability. By way of exception, the shareholders can have personal liabilities.
THE ARTICLE OF ASSOCIATION OF GmbH
The AoA can be customized. Since the reform of the GmbH-Law there is, on the other hand, the possibility to use a sample for the AoA (so-called “Musterprotokoll”). Given the premise of a maximum of three shareholders and only one managing director, this sample can be used. Also, only cash and no contributions in kind may be provided.
The shareholders make their decisions at the shareholders’ meeting by means of shareholder resolutions. Required majorities can be specified in the AoA. The AoA must indicate the number and nominal value of the shares of the shareholders. The nominal sum has to be in full Euros, therefore the minimum nominal sum is EUR 1,00.
Gurcan Partners is a corporate member of:
REGISTRATION OF THE GmbH
When the nominal capital is contributed and the AoA is notarized, the notary has to apply for registration of the GmbH at the commercial register.
The following documents are needed for that:
- Legitimation of the managing director, if not appointed in the AoA
- List of the shareholders (Surname, name, date of birth, domicile and the nominal sum as well as the serial numbers of the shares of the shareholders), signed by the managing director
- In case of contributions in kind: documents for proof that the worth of the contribution in kind is equal the nominal sum
- Guarantee of causing the contributions on the shares and that these are now completely in the hand of the GmbH
Business letters of the GmbH have to have at least the following details:
- Name of the GmbH,
- The legal form,
- The seat of the GmbH, (We provide seat address for companies. Please contact us)
- Name of the registered commercial registry
- The registry number.
- All managing directors have to be named.
COMPANY REGISTRATION IN GERMANY FOR NON-RESIDENTS
The formation of the association is not bound to the nationality of the shareholders or the managing directors. Even foreigners can found an association or be appointed a managing director without authorization.
A foreign managing director with residence or settlement permit, meaning with domicile in Germany, can manage a GmbH without any difficulty.
The same thing applies to EU-Citizens because of their EU freedoms, namely the freedom of movement. Entry and residence as well as admission to work, be it self-employed or dependent, is possible without any permission.
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COMPANY REGISTRATION IN GERMANY FOR NON-EU-RESIDENTS
For non-EU-Citizens, it has long been controversial in Germany whether managing directors had to have a residence permit.
By now there is the consensus that these managing directors do not need any residence title.
In some cases, it is argued that the managing directors shall at least have the possibility to be able to enter Germany for at least three months within a calendar year. But even this point is judged differently. It is advisable to clarify with the respective commercial registry because there is nationwide inconsistency regarding this point.
Check Frequently Asked Questions about Company Registration in Germany.
Company Registration in Germany
Att. Hülya Oruç
All rights reserved. All rights of the Company Registration in Germany article belong to Gurcan Partners International Law Firm. The author has no responsibility for the information in this article. This article is prepared just to inform.
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