Business structures in Germany

1. Quick comparison

“Limited liability” does not remove director duties, guarantees or all personal exposure. Capital is not a fee: it funds the company and must be adequate for its operations.

2. Einzelunternehmen

A single person operates directly and generally bears personal liability. Registration, accounting and tax duties depend on whether the activity is freiberuflich or gewerblich, commercial scale and other thresholds. No corporate minimum capital does not mean no funding is needed.

3. GbR and eGbR

Two or more people can pursue a common purpose through a GbR. A written agreement is strongly advisable because contribution, decision, exit and liability disputes otherwise become expensive. Partners generally face personal liability.

Since MoPeG, a GbR can register as an eGbR. Registration is particularly relevant where the society itself must appear in registers, including certain property transactions. Obtain legal advice for the current registration and representation rules.

4. UG (haftungsbeschränkt)

A UG is a GmbH variant formed below the €25,000 GmbH minimum. Shares use full euros, so €1 is technically possible; it is rarely sensible once notary, register, banking and operating costs are considered. Capital must be fully paid before registration and contributions in kind are excluded.

One quarter of adjusted annual profit goes to the statutory reserve until the capital path changes under the GmbHG.

5. GmbH

The nominal minimum share capital is €25,000. Formation includes notarised articles, management appointment, capital arrangements, Handelsregister and tax/transparency administration. Rules on the amount payable before registration depend on formation facts; do not reduce the process to “pay €25,000.”