Glossary · Legal forms

gUG (non-profit UG)

Also: gemeinnützige UG (haftungsbeschränkt), charitable UG

In short

The gUG is a UG (haftungsbeschränkt) that exclusively and directly pursues charitable, benevolent or religious purposes. It manages with less than €25,000 share capital and, once recognised, is exempt from corporation tax and trade tax in its tax-privileged sphere.

gUG (non-profit UG) explained

For tax purposes, the gUG is treated the same as the gGmbH: after the assessment notice, it may issue donation receipts (Sec. 60a, 63 (5) AO), but profits may not flow to the shareholders. Like every UG, it must pay in its share capital in full in cash and put a quarter of its annual net profit into the statutory reserve (Sec. 5a (3) GmbHG). €500 to €1,000 share capital is recommended so that the formation costs are covered. If it increases its share capital to €25,000, it can become a gGmbH. Recht 24/7 coordinates the articles of association with the tax office before notarisation.

Legal basisSec. 5a GmbHG; Sec. 51 to 68, 60a, 63 (5) AO

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Form a gUG

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Related terms

gGmbH (non-profit GmbH)The gGmbH is a GmbH whose articles of association and actual management pursue exclusively and directly charitable, benevolent or religious purposes. In its tax-privileged sphere, it is exempt from corporation tax and trade tax, but may not distribute profits.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.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.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.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.

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