The most common legal form for corporations in Germany is the private limited liability company (GmbH). It combines a great level of freedom with a low level of commitment.
Forming of GmbH in Germany process is divided into five steps.
A minimum of one shareholder (private individual or legal organisation) is necessary in Setting Up A GmbH In Germany form a GmbH in Germany. The nationality and place of residence of a GmbH's shareholders and managing director(s) are irrelevant. The GmbH must, however, have a German business address as well as a local representative. The creation of a GmbH necessitates the cooperation of a German notary.
The formation of a GmbH necessitates the submission of certain documents. Typically, the notary will want papers proving the existence of any parent corporation as well as power of attorney for those working on its behalf. In general, an excerpt from the foreign commercial registry as well as the foreign parent company's articles of association will be requested.
Take into consideration that depending on the legal form and origin of the foreign firm, certain verification and translation requirements apply. It is advisable to seek specific counsel from a German notary at an early stage.
Articles of Association
The company's identity and constitution are shaped by the articles of association. The GmbH is a relatively flexible corporation structure due to the vast opportunity for contractual design. Share capital, shareholders and their proportionate shares owned, business name, registration office, and company purpose are all required elements.
Model articles of organisation (for cash subscription setups with a maximum of three shareholders and one managing director) are offered for a standardised establishment of a GmbH. These documents must still be notarized, albeit at a lower cost. In addition, the chambers of business and industry provide sample deeds.
A GmbH's share capital
A minimum share capital of EUR 25,000 is required by the GmbH. At the time of registration, at least half of the necessary capital (EUR 12,500) must be contributed to a bank account in person. The capital is not a deposit and can be used for the company's operations to some extent.
In addition to cash, in-kind contributions can be made to the share capital (e.g. real estate or patents). The articles of association must agree on a contribution in kind, a valuation study is required, and the asset must be fully contributed.
Registration of a new business
It is necessary to register with the German commercial registry (Handelsregister) through a German notary for Forming A Company In Germany. The GmbH becomes a legal entity and has limited responsibility once it is enrolled in the commercial register.
The appropriate local trade office (Gewerbe-/Ordnungsamt) must be notified of the planned activity before business activities can begin. In the vast majority of circumstances, a business license or permission is not required to register a business. A permit or authorization may be necessary in some industries.
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