Found­ing a GmbH: Require­ments

The GmbH (lim­ited liab­il­ity com­pany) is one of the most pop­u­lar legal forms in Ger­many. But what require­ments must be met in order to suc­cess­fully estab­lish a GmbH? In this art­icle, we explain the most import­ant require­ments, includ­ing legal require­ments, the required GmbH share cap­ital, the steps for found­ing a GmbH and what other costs you might incur.

1 What is a GmbH?

The GmbH is leg­ally clas­si­fied as a legal entity and is one of the most com­mon busi­ness struc­tures in Ger­many. It has its own rights and oblig­a­tions, as out­lined in the HGB (Com­mer­cial Code) and GmbHG (Lim­ited Liab­il­ity Com­pan­ies Act). For instance, a GmbH offers its share­hold­ers the advant­age of lim­ited liab­il­ity, mean­ing liab­il­ity is restric­ted to the company’s assets, thereby pro­tect­ing per­sonal assets. How­ever, a GmbH also has its dis­ad­vant­ages dis­cussed

2. what are the advant­ages and dis­ad­vant­ages of a GmbH

Advant­ages:

• Liab­il­ity is lim­ited to the GmbH’s assets
• The legal form inspires trust and is inter­na­tion­ally recog­nized
• Tax advant­ages when rein­vest­ing busi­ness profits in the com­pany
• It is pos­sible to appoint a man­aging dir­ector who is dif­fer­ent from the share­hold­ers, which sim­pli­fies the par­ti­cip­a­tion of external investors.

Dis­ad­vant­ages:

• Form­a­tion is com­plex and costly com­pared to sole pro­pri­et­or­ships
• A min­imum cap­ital of €12,500 (or €25,000) is required
• Man­dat­ory double-entry book­keep­ing, annual fin­an­cial state­ments, and bal­ance sheets
• Recom­mend­a­tion of a Tax Acount­ant
  

3. legal require­ments for the form­a­tion of a GmbH

The legal frame­work for found­ing a GmbH is gov­erned by the Ger­man GmbHG. Key require­ments include:

1. Share­holder List: A GmbH can be foun­ded by one or more per­sons. It does not mat­ter whether they are nat­ural per­sons or legal entit­ies (com­pan­ies). This is recor­ded in the list of share­hold­ers with their respect­ive shares. Per­sons who are included here are then referred to as share­hold­ers of the com­pany.
2. Art­icles of Asso­ci­ation: The art­icles of asso­ci­ation form the legal basis of the GmbH. These often con­tain a para­graph on the appoint­ment of the man­aging dir­ector, in which the man­aging dir­ector is determ­ined. The art­icles of asso­ci­ation must be not­ar­ised by a not­ary and con­tain the fol­low­ing points:
   1. The company’s name
   2. Registered office
   3. Busi­ness pur­pose
   4. Share cap­ital amount
   5. Num­ber and value of shares

A GmbH can also be estab­lished using a stand­ard tem­plate (Muster­pro­tokoll). How­ever, this is only recom­men­ded for single-mem­ber com­pan­ies with no spe­cial require­ments for the art­icles. This method may res­ult in addi­tional costs later due to its lim­it­a­tions. That is why we usu­ally advise against this Muster­pro­tokoll.

3. Regis­tra­tion in the Com­mer­cial Register: The GmbH comes into exist­ence only upon regis­tra­tion. Before that, it is con­sidered a “Vor-GmbH.”
4. Com­pany Name: The name must not be mis­lead­ing or already registered in the com­mer­cial or trade­mark register.

Depend­ing on the com­pany pur­pose, addi­tional steps might be required. For spe­cial­ized cases, con­sult­ing a law­yer or tax advisor is advis­able.

4. dur­a­tion of the form­a­tion and the most import­ant steps for the form­a­tion of a GmbH

Found­ing a GmbH can take between 4 to 12 weeks. Famil­i­ar­iz­ing your­self with the main steps can help you tackle admin­is­trat­ive tasks early.

The found­ing pro­cess of a GmbH is usu­ally a step-by-step pro­cess. Here is an over­view:

1. Pre­pare the Art­icles of Asso­ci­ation: Address key points like the com­pany name, share dis­tri­bu­tion, and busi­ness pur­pose. For com­plex setups, con­sult a law­yer.
   Dur­a­tion: 7–14 days
2. Name Check: The trade register has strict guidelines on the com­pany name. Addi­tion­ally, make sure that the name is not already given to another com­pany and that it does not infringe trade­mark rights. The Cham­ber of Industry and Com­merce (IHK) can also do these checks for you, given a cer­tain fee.
   Dur­a­tion: 7–10 days
3. Not­ary Appoint­ment: The art­icles of asso­ci­ation need be not­ar­ised. The not­ary also takes care of the trade register regis­tra­tion.
   Dur­a­tion: 7–10 days
4. Open a Busi­ness Account: After sign­ing your art­icles of asso­ci­ation, you will need to open a busi­ness bank account. This account will hold the GmbHs share cap­ital.
   On this web­site you will learn You can find out how our com­pan­ies ensure that as a new man­aging dir­ector you don’t have to worry about busi­ness accounts.
   Dur­a­tion: 2–4 Weeks
5. Regis­tra­tion in the Com­mer­cial Register: The not­ary takes care of this regis­tra­tion. The GmbH only gains legal status upon offi­cial regis­tra­tion.

5. Costs of Estab­lish­ing a GmbH: Share Cap­ital and Addi­tional Expenses

The fin­an­cial require­ments are a cent­ral point when found­ing a GmbH. These are made up of the share cap­ital, one-off costs and ongo­ing costs. The min­imum share cap­ital for a GmbH is 25,000 euros. The fol­low­ing reg­u­la­tions apply:

• Cash or assets: The share cap­ital can be con­trib­uted in the form of cash con­tri­bu­tions or con­tri­bu­tions in kind (e.g. machinery, real estate).
• Min­imum require­ments: Before the com­pany is registered with the trade register, at least half (12,500 Euro) of the share cap­ital needs to be depos­ited. Is this the case, part of the future earn­ings must be retained in the GmbH until the full share cap­ital of 25,000 Euro is reached.

Import­ant: The share cap­ital is an essen­tial com­pon­ent of the com­pany, as it serves as the fin­an­cial found­a­tion of the busi­ness and is inten­ded to provide secur­ity for cred­it­ors.

What many first-time founders often over­look is that estab­lish­ing a GmbH can also involve many addi­tional costs. These include, for example:

• Not­ary fees: These arise for the not­ar­iz­a­tion of the art­icles of asso­ci­ation and the regis­tra­tion in the com­mer­cial register. The costs vary depend­ing on the share cap­ital.
• Com­mer­cial register fees: Regis­ter­ing the GmbH in the com­mer­cial register typ­ic­ally costs between €150 and €300.
• Busi­ness account: Banks often charge fees for open­ing and man­aging a busi­ness account.

Learn more about the costs of found­ing a GmbH here. more about the costs of found­ing a GmbH.

6. After Estab­lish­ing the GmbH

Once your com­pany has been estab­lished, you are required to com­plete sev­eral neces­sary steps, and many addi­tional ones are strongly recom­men­ded. If you decide to pur­chase a shelf com­pany from start­bereit, we provide detailed doc­u­ments and guidelines for all the man­dat­ory and recom­men­ded regis­tra­tions. Here is an over­view:

1. Regis­tra­tion with the tax office: One of the most import­ant regis­tra­tions when set­ting up a GmbH is with the tax office. This is usu­ally done via the tax con­sult­ant. We have pub­lished a very help­ful art­icle in our Start-up academy on the sub­ject of the tax office writ­ten.
2. Trans­par­ency registerWhether man­aging dir­ector or share­holder, a trans­par­ency register noti­fic­a­tion has been man­dat­ory since Decem­ber 2017 and dis­closes the bene­fi­cial own­ers of com­pan­ies and organ­isa­tions. The Founders’ Academy also includes a Art­icles on the trans­par­ency register.
3. Trade officeDepend­ing on the pur­pose of your busi­ness and the sec­tor, regis­tra­tion with the trade office is man­dat­ory. If you want to know whether your busi­ness is also sub­ject to regis­tra­tion, take a look at this art­icle after.
4. Fed­eral Employ­ment Agency: If you are plan­ning to hire employ­ees, you will need a com­pany num­ber from the Fed­eral Employ­ment Agency. We have a spe­cial Art­icles about the employ­ment agency, which deals exclus­ively with vari­ous top­ics relat­ing to „hir­ing employ­ees“.
5. Employer’s liab­il­ity insur­ance asso­ci­ation: Beruf­s­gen­os­senschaften are respons­ible for stat­utory acci­dent insur­ance in Ger­many, cov­er­ing work­place acci­dents, com­mut­ing acci­dents, and occu­pa­tional ill­nesses. Com­pan­ies must register with the appro­pri­ate asso­ci­ation imme­di­ately after estab­lish­ment. You can read more about this in our ded­ic­ated art­icle here .
6. Insur­ances„The unex­pec­ted often hap­pens“ — To pro­tect your­self, it is often worth tak­ing out addi­tional insur­ance. The num­ber of pos­sible insur­ances can quickly become over­whelm­ing. That is why we have developed a Guide to the topic of insur­ance writ­ten.

Even after the offi­cial regis­tra­tion in the com­mer­cial register, the setup phase is not com­plete. We always recom­mend thor­oughly address­ing the vari­ous regis­tra­tions required for your company’s pur­pose. How­ever, if you pur­chase a shelf com­pany from start­bereit, our sup­port does not end with sign­ing the doc­u­ments. We also provide com­pre­hens­ive assist­ance after the pur­chase.

7. con­clu­sion

Found­ing a GmbH requires care­ful pre­par­a­tion and adher­ence to legal require­ments. Key ele­ments include the art­icles of asso­ci­ation, share cap­ital, and regis­tra­tion in the com­mer­cial register. With proper plan­ning and the sup­port of experts like start­bereit, you can estab­lish your GmbH quickly and hassle-free. This way, you don’t have to worry about meet­ing the require­ments for found­ing a GmbH.

Are you ready to estab­lish your GmbH? Click here, to find our how we can sup­port you.

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