Glossary · Formation and notary

GmbH in formation (Vor-GmbH)

Also: Vor-GmbH, GmbH i. G., GmbH in Gründung, pre-incorporation company, UG in formation

In short

Between notarisation and entry in the commercial register, the GmbH exists as a pre-company (Vor-GmbH) and trades with the suffix "i. G." (in formation). Anyone who acts in its name during this phase is personally and jointly liable.

GmbH in formation (Vor-GmbH) explained

Before registration, the GmbH does not exist as such (Sec. 11 (1) GmbHG). The pre-company can already act, however: the business account into which the shareholders pay the share capital is opened in its name. The risk lies with those acting, who are personally and jointly liable (Sec. 11 (2) GmbHG). So it is better to conclude larger contracts only after registration. Even earlier, before the notary appointment, there is only a pre-formation partnership, whose contracts and accounts do not automatically pass to the GmbH. The same applies to the UG, which in this phase is called a "UG in formation".

Legal basisSec. 11 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

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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.Share capital (Stammkapital)The share capital is the capital of a GmbH or UG specified in the articles of association; for a GmbH it is at least €25,000, for a UG less, mathematically from €1. For a GmbH, at least €12,500 must be paid in for the application; for a UG, the full amount.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.Company name (Firma)In the legal sense, the "Firma" is the name under which a merchant conducts business and signs. It must be distinctive, must not be misleading and must contain the legal form suffix.

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