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Germany Company Forms Guide (Gesellschaftsformen: GmbH, UG, AG, & Co. KG)

A comprehensive guide to the main legal forms for businesses in Germany — GmbH (Gesellschaft mit beschränkter Haftung), UG (Unternehmergesellschaft), AG (Aktiengesellschaft), KG (Kommanditgesellschaft), and the popular GmbH & Co. KG hybrid — covering minimum capital, liability, registration, and tax implications.

Choosing the right legal form (Rechtsform) is a foundational decision for any business in Germany. The choice affects liability, tax treatment, capital requirements, management structure, and public perception. All companies must register with the Handelsregister (commercial register) and the Gewerbeamt (trade office). For related reading, see our Corporate Tax Guide → and Starting a Business Guide →.

Limited Liability Companies: GmbH, UG, and AG

  • GmbH (Gesellschaft mit beschränkter Haftung): Minimum share capital €25,000 (at least half must be paid up on registration). Shareholders' liability is limited to their capital contribution. Taxed via KSt (15%) + Soli + Gewerbesteuer. The managing director (Geschäftsführer) is personally liable for social security and certain taxes. Most popular form for small and medium businesses.
  • UG (Unternehmergesellschaft haftungsbeschränkt): A mini-GmbH with minimum capital of just €1. Must retain 25% of annual profits until the capital reaches €25,000, at which point it can convert to a GmbH. Lower setup costs (~€300–€500 notary fees). All other rules are identical to GmbH. Popular for startups and low-capital ventures.
  • AG (Aktiengesellschaft — stock corporation): Minimum share capital €50,000. Requires a two-tier board: Vorstand (management board) and Aufsichtsrat (supervisory board — mandatory for AGs with >2,000 employees, voluntary otherwise). Shares can be listed on the stock exchange. More regulated and less flexible than a GmbH.

Partnerships and Hybrid Forms

  • KG (Kommanditgesellschaft — limited partnership): Has at least one general partner (Komplementär — personally liable) and one or more limited partners (Kommanditisten — liability limited to their contribution). Not subject to KSt; instead, profits flow through to partners and are taxed at the individual level (Einkommensteuer).
  • GmbH & Co. KG: A KG where the general partner is a GmbH (which has limited liability), effectively limiting all partners' liability. Extremely popular for family businesses and real estate companies. Offers the tax transparency of a partnership with the liability protection of a corporation.
  • GbR (Gesellschaft bürgerlichen Rechts): The simplest form — no minimum capital, no Handelsregister registration required (unless trading). All partners are personally liable. Suitable only for very small businesses or freelancers working together.
  • Registration process: All company forms (except GbR for non-trading activities) must register with the Handelsregister (notarised) and Gewerbeamt. The Finanzamt issues a tax number (Steuernummer) after receiving your Fragebogen zur steuerlichen Erfassung (tax registration questionnaire).