Glossary · Legal forms

Corporation (Kapitalgesellschaft)

Also: Kapitalgesellschaft, capital company

In short

In a corporation, the capital contributed is what matters, not the person of the shareholders; examples are the GmbH, UG and AG. It is a legal entity and in principle is only liable with the company's assets.

Corporation (Kapitalgesellschaft) explained

Shareholders can change, but the company continues to exist. The law requires minimum capital: €25,000 for a GmbH, €50,000 for an AG and from €1 for a UG; a GmbH and UG need notarised articles of association. A corporation is run by bodies whose members do not have to be shareholders, such as an external managing director. For tax purposes, it pays corporation tax itself, and its activity is always deemed to be a commercial business (Sec. 2 (2) GewStG). The shareholders also pay tax on distributions. A balance sheet and publication of the annual financial statements are mandatory. Its counterpart is the partnership, in which the partners work in the business and are personally liable.

Legal basisSec. 13 GmbHG, Sec. 1 AktG, Sec. 2 (2) GewStG

Matching service

Form a GmbH

€319net plus VAT, notary and court fees, IHK and trade registration costs

View service

Related terms

GmbH (limited liability company)The GmbH is a corporation and legal entity formed by one or more persons with at least €25,000 share capital. As soon as it is entered in the commercial register, in principle only the company's assets are liable for its debts.Partnership (Personengesellschaft)In a partnership, at least two partners join together, and the partnership depends on their personal involvement; examples are the GbR, OHG, KG and PartG. There is no minimum capital, but at least one partner is liable without limit.UG (haftungsbeschränkt)The UG (haftungsbeschränkt) is not a separate legal form, but a GmbH with less than €25,000 share capital, mathematically from €1, which must be paid in full in cash before the application. In return, it must put a quarter of its annual net profit into a reserve every year.Articles of association (Gesellschaftsvertrag)The articles of association (or partnership agreement) are the contractual basis of a company and set out, for example, its name, registered office, purpose, capital and the rights of the shareholders; for a GmbH they are also called the Satzung. For a GmbH and UG they must be notarised; for a GbR no particular form is required.Corporation tax (Körperschaftsteuer)Corporation tax is the tax on the profits of corporations such as the GmbH and UG. Until 2027 it is 15% plus solidarity surcharge, after which it falls gradually to 10% from 2032.External managing director (Fremdgeschäftsführer)An external managing director runs a GmbH or UG without holding a share in it. They are appointed by the shareholders and are subject to their instructions.

Your case starts here.

Get started

Personal advice
Directly from a lawyer

Transparent fixed prices
with no surprises.

Response within
24 hours

Securely insured
up to €2.5 million

No legal jargon, just clear answers.

The Recht 24/7 newsletter: deadlines, rulings and tips for founders and clients. Once a month.