Glossary · Legal forms

GmbH (limited liability company)

Also: Gesellschaft mit beschränkter Haftung, private limited company, German limited liability company

In short

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.

GmbH (limited liability company) explained

At least €12,500 must be paid in for the application, with at least a quarter on each share (Sec. 7 (2) GmbHG). The money is not held in a blocked account; it belongs to the GmbH and may be spent on running the business. The articles of association are notarised, in person or by video. The GmbH has two mandatory bodies, the shareholders' meeting and the managing director, is always deemed a commercial company and must prepare balance sheets. It pays corporation tax, solidarity surcharge and trade tax on its profit. Before registration, those acting on its behalf are personally liable (Sec. 11 (2) GmbHG). Registration usually takes 5 to 16 days after notarisation.

Legal basisSec. 1, 5, 7, 11, 13 GmbHG

More in our guideWhat is a GmbH? Meaning and key features explained simplyGmbH stands for Gesellschaft mit beschränkter Haftung, a German limited liability company. It is a corporation and a legal entity in its own right, formed by one or more persons with at least €25,000 in share capital, of which at least €12,500 must be paid in before registration (Sec. 5 and 7 GmbHG). Once the GmbH is entered in the commercial register, only the company's assets are in principle liable for its debts (Sec. 13 (2) GmbHG).Read the guide

Matching service

Form a GmbH

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

View service

Related terms

Corporation (Kapitalgesellschaft)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.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.Managing director (Geschäftsführer)The managing director runs the GmbH or UG and represents it in and out of court. They must be a natural person with full legal capacity and are appointed by the shareholders.Notarisation (notarielle Beurkundung)In notarisation, the text is read aloud in the presence of the notary, the notary explains its legal implications, and the parties approve and sign the record. In certification, the notary only confirms that the signature is genuine.Shareholders' meeting (Gesellschafterversammlung)The shareholders' meeting is the body in which the shareholders of a GmbH or UG pass their resolutions. Among other things, it adopts the annual financial statements, decides on the use of profits and appoints the managing directors.

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.