80333 MUNICH

Company Formation

Our German company formation services to :
• Our service fee of 750 Euros for forming a limited liability company in Germany covers:
• Drawing up a memorandum of associati­on in English/ German language
• Checking that the German company name you would like is admissible
• Assisting with the finding of the registered address in Germany
• Having a German notary record the memorandum of association
• Additional German company formation services will be charged separately
• Assisting with the opening of a German bank account
• Registering the company with the German trade licensing office and the German tax office
• Registering the company for EU trade purposes for obtainig an EU VAT ID

General information on starting a company in Germany

For many years now the GmbH (limited liability company) has been by far the most popular legal form in Germany, in which a sole trader or two or more partners together run their own business. When a GmbH (limited liability company) is incorporated, a legal entity is created with its own rights and duties and its own name. The GmbH´s rights and duties are therefore separated from those of the shareholders. The GmbH can be used in a versatile manner, because the design of its organisation and administration is extremely flexible.

The liability risk is basically limited to the GmbH´s assets. In principle, personal liability is excluded for the shareholders. Should the GmbH become insolvent, the shareholders are not liable with their private assets above and beyond their contribution to the company capital. If they have not paid in their contribution, in the case of insolvency their liability is limited to the outstanding amount of their contribution to be paid in. In exceptional cases a breach of duties can entail personal liability for the director or the shareholders.

Moreover, the restriction of personal liability does not apply to the shareholders until the GmbH (limited liability company) has been registered in the Company Register. For it is only when registered that the GmbH becomes an independent legal entity. If liabilities were assumed on behalf of the GmbH before the registration (e.g. the future business premises are already registered in the name of the GmbH “being set up”), those acting and the shareholders can be personally liable.

A GmbH (limited liability company) can be set up by several persons, as well as by just one person (“a one-man GmbH”). The memorandum of association incorporating the GmbH must always be recorded by a notary. The recording by a notary incurs notarial costs, the amount of which depends on the amount of the share capital chosen. Besides individuals, shareholders can also be legal entities.

Share capital
The GmbH´s share capital must be at least 25,000 euros. The memorandum of association must state the share capital. The same applies to the number of capital shares taken on and their nominal value. The nominal value of the capital shares must be stated in full euros. A contribution has to be made for each capital share. With cash contributions, the registration can only be made when a quarter of the nominal value has been paid up for each share. Altogether, though, at least 12,500 euros have to be paid up.

The company´s business
The company´s business has to be described in the memorandum of association in a way that is so clear that persons operating in the commercial market can have a concrete idea of the company´s business. When the company is registered, a company address in Germany must be indicated to ensure that the company can be reached.

The company name
Personal names, names of objects and fancy names are admissible. The personal name must contain the family name of at least one shareholder (Smith GmbH) or the name of a trading company that is a shareholder (without the legal form appendage). The object name must clearly indicate the company´s business and also have an individualising appendage that sets it apart from the quantity of companies with a similar company business. The name of the object must therefore not only be, say, “Steel Trading-GmbH”, but also for instance “Crown Steel Trading-GmbH”. A combination of names and object indication is likewise admissible (Smith Steel Trading GmbH). The company name can also comprise fancy names (abbreviations, neologisms, etc.).