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Company Formation
Germany is a country that welcomes foreign investors and the Government supports initiatives that create new jobs. The foreign trade law sets forth the main conditions in which foreign entrepreneurs may enter the market. There are a few limitations, namely in areas like defense and there are requirements to maintain public order.
Formation Procedure in Germany
- Choose a company type
- Choose a company name
- Execute the the company deeed
- Deposit the capital
- Register and license
The first step is to choose the legal form. The legal form can depend on the capital and number of partners. Mostly preffered company legal form is Limited Company (GmbH).
The new company is required to have a unique name an d it does not conflict the one of a registered entity. The company name checked prior to proceeding further.
The scope of business is drafted and executed before a German notary. The founders are also required to prepare the AoA and provide IDs, as well as specimen signatures, as needed.
The minimum share capital is to be into a Corporate account opened in Germany.The share capital depends on the choosen legal form and it is a larger for public limited companies.
The company is entered into the Commercial Register and afterword registered with tax authorities. The founders will apply for permits and Special licenses if it is required to in their business field.
German GmbH
GmbH-Private Limited Liability Company can be incorporated in Germany by at least one investor with a minimum share capital of 25,000 EUR. If you want to open a company in Germany as a GMBH, you should know that the company's capital can be submitted in cash or kind (in this case, the value of the assets must be shown specifically in the articles of association). One issue to consider is that the shares of the German GMBH cannot be transferred to the public nor registered at the Stock Market. The General Shareholder's Meeting is the one that ensures the management of the GMBH. The day-to-day corporate decisions are made by the company’s director which is appointed by the general meeting of the shareholders.
AG-German Joint Stock Company
This is suited to large businesses because of the possibility to increase the initial capital through the registration of the shares to the Stock Market. The German AG requires a share capital of minimum 50,000 EUR. The members are only liable up to the amount they have contributed to the capital, just like in the case of the joint stock companies. The management is assured by the management board which is checked periodically by a supervisory board which is formed by at least three members. For this business type, the accounts must be evaluated by a statutory auditor.
German Limited Partnership
Formed by two types of partners: the silent partners who must bring a contribution to the entity’s capital and has limited liability to the extent of that contribution and the general partners who don’t necessarily make a contribution to the entity’s capital but who have unlimited liability for the entity’s debts and who can claim profits. The general partners are those who have decisional powers in the German limited partnership while the silent partners cannot participate in any of the management decisions.
Sole Trader
Formed by a single individual with his own personal assets and no protection from liability in case the entity is facing bankruptcy.
Branch
Branches are also popular methods of entering the German market and many foreign investors choose them as the first step in their business path. The branch is not a legal entity, this is why its assets and liabilities belong to the parent company. You can reach out to our company formation specialists in Germany for more details regarding the particularities of these types of structures.
Our Services
- Consultation of the company type.
- Validation of the company name.
- Preparation of the articles of incorporation (in English and in Germany language)
- Preperation of appointments with German notaries.
- Assisting to find a virtual office.
- Opening a Corporate bank account.
- Application to the tax authority.
- Application to SSI.