Setting up a GmbH:
from the draft to the registration.
The GmbH is the legal form of the German Mittelstand: liability shield, clear structures, high acceptance. This guide leads through the formation – articles of association or model protocol, share capital, notarisation, commercial register – and explains when the UG (limited liability) is the better launchpad.
GmbH or UG (limited liability)?
Both are "genuine" limited liability companies with limitation of liability to the company's assets. The GmbH requires €25,000 in share capital, of which at least half (€12,500) must be paid in for registration. The UG (limited liability) starts from €1 – but must set aside a quarter of its profits annually into a reserve until €25,000 is reached, and must visibly carry the suffix in its name. Rule of thumb: those who have the capital or need to convince business partners of substance set up the GmbH straight away; the UG is the launchpad for formations with limited capital.
Individual Articles of Association or Model Protocol
The Model protocol is the simplified, more cost-effective route – but only possible with a maximum of three shareholders and one managing director, without any deviation from the statutory standard. As soon as several shareholders work together, individual articles of association belong on the table: restrictions on transfer of shares, pre-emption and co-sale rights, exit compensation rules, non-compete clauses, resolution majorities, succession in the event of death. These clauses later determine the value of the shareholding – not the year of formation.
The Formation Step by Step
- 1. Preparation: Clarify the company name and business purpose – we check registrability, on request with prior IHK coordination.
- 2. Notarisation: The articles of association or model protocol are notarised; the managing directors are appointed. Since 2022, cash formation has also been possible online via video notarisation through the system of the Federal Chamber of Notaries (Bundesnotarkammer).
- 3. Payment: Opening the business account and paying in the share capital (at least €12,500 for the GmbH).
- 4. Commercial Register: The notary submits the application electronically; with the registration the GmbH comes into existence as such.
- 5. Follow-up: Trade registration, tax registration, transparency register – we tell you what needs to be done when.
The Pre-GmbH and Other Pitfalls
Between notarisation and registration, the pre-GmbH exists: anyone conducting business already at this stage may be personally liable under certain circumstances (liability for acting on behalf of the company and liability for capital shortfall). Other classics: disguised contribution in kind (paying in share capital and immediately using it for a purchase from a shareholder), insufficient capital, and missing shareholder resolutions. Properly formed, however, the GmbH's liability shield is very robust – it is only breached in narrow exceptional cases.
What the Formation Costs
Notary and register fees are based on the GNotKG and the share capital: a one-person formation with model protocol and €25,000 share capital comes to a low four-figure amount in total including the registration fee, individual articles of association somewhat more – a manageable investment in relation to the liability protection. We will tell you the exact fees in advance. By the way: later measures too – transfers of shares, capital increases, changes of managing director, conversions – are part of the notarial support of your company.
Briefly answered
GmbH or UG – which is better?
The GmbH with €25,000 in share capital enjoys higher acceptance in business dealings; the UG (limited liability) starts from €1, but must retain profits until €25,000 is reached. Those who can raise the capital usually set up the GmbH directly – the UG is the launchpad and can later grow into a GmbH.
How long does the formation take?
Notarisation is possible at short notice with complete documents. After that, it depends on the account opening, payment and the registry court – in practice, it usually takes one to three weeks until registration. In the meantime, act with restraint: in the pre-GmbH, personal liability is a risk.
Do I have to come to the notary in person?
Not necessarily: since 2022, cash formation of a GmbH has also been possible online via video notarisation using the procedure of the Federal Chamber of Notaries (Bundesnotarkammer), as well as most commercial register applications. However, especially with several shareholders, a personal appointment with advice on the articles of association is often the better choice.
What does forming a GmbH cost?
The fees follow the GNotKG and depend on the share capital and structure: model formations are the cheapest, individual articles of association somewhat more expensive; the commercial register fee is added. Overall, a standard formation is in the low four-figure range – we will tell you the exact amount in advance.
When am I personally liable despite the GmbH?
Above all during the formation phase (pre-GmbH, capital shortfall), in cases of disguised contributions in kind, breaches of managing director duties (such as delaying insolvency or failing to pay taxes and social security contributions), and personal guarantees. Proper formation and orderly management keep the liability shield intact.
Formation, articles of association, commercial register – all from a single source.
We draft your articles of association, notarise the formation and support your company beyond registration – including in the case of share sales, capital measures and succession.