Running a company without risking private savings? The limited liability company (GmbH for short) makes it possible. This form of company limits the liability of Shareholder on the business assets and thus reduces the economic risk. You can find out about the other advantages of a GmbH formation in this article. Also good to know: How exactly does the company formation of a GmbH work and how long does the formation process take?
What is a GmbH?
The limited liability partnership is a German form of company. It is classified as a corporation. The legal basis is the "Gesetz betreffend die Gesellschaften mit beschränkter Haftung" (GmbHG).
A GmbH is considered a legal entity. It is made up of its shareholders and is represented externally by a managing director.
What are the requirements for GmbH formation?
A GmbH can be initiated by any natural person with unlimited legal capacity. At least one natural person is required to found a GmbH. In addition, any number of shareholders and companies with legal capacity can participate in the company formation be involved. Legal entities - for example associations and foundations - can also form a limited liability company.
A share capital of at least EUR 25,000 is required for the GmbH formation. This can be contributed in cash or in kind. You do not have to deposit the share capital in full when the company is founded. It is sufficient to pay in at least 12,500 euros.
As part of the company formation a notarized partnership agreement must be concluded. In addition to the name, object and registered office of the GmbH, this also regulates the amount of the share capital and the distribution of the capital contribution among the various shareholders.
What are the advantages of a GmbH?
As a shareholder or managing director of a GmbH, you can profitably utilize the advantages of this legal form. But what are they in detail?
Advantage 1: Limited liability to share capital
Limited liability is often the deciding factor when setting up a GmbH. A limited liability company does not provide for any personal liability of the shareholders towards creditors. The GmbH is an independent legal entity and is liable for itself - up to the amount of the deposited share capital. However, there are exceptions. If, for example, as the managing director of a GmbH, you fail to collect the capital contributions due from the shareholders on time or if you are deliberately complicit in the insolvency of the GmbH, you are also liable with your personal assets.
Advantage 2: Flexibility
The GmbH formation is permitted for any legally permissible purpose. This means that whether you are an artist, want to set up a craft business or open a restaurant, you can do so as a limited liability company.
A GmbH also offers you the option of appointing an external managing director. This makes sense, for example, if you want someone with specific knowledge to manage your company that you only have to a limited extent.
Advantage 3: Own legal capacity
As mentioned above, a GmbH is an independent legal entity. As such, a GmbH can conclude legal transactions independently. For example, it can acquire real estate or buy shares in another company. This protects the privacy of the shareholders, as their names do not appear to the outside world.
Advantage 4: Uncomplicated sale of the company
The sale of a GmbH is carried out by selling the shareholder shares to the buyer. It is not necessary to transfer all of the company 's assets individually to the buyer(s). This not only saves valuable time, but also spares your nerves.
How do you set up a GmbH?
At the beginning of a GmbH formation, you decide on the company name, registered office and the purpose of the business - together with your fellow partners if necessary. The number of shareholders and the managing directors are determined. In addition, the form and amount of the share capital must be determined. These points are recorded in the articles of association. The agreement is signed by all shareholders and then notarized.
As soon as the articles of association have been notarized, the share capital of at least EUR 12,500 must be paid into the GmbH's business account.
The articles of association have been notarized and the share capital has been deposited: The GmbH must now be entered in the commercial register by a notary. The following documents are required for this:
- the social contract
- the legitimization of the managing director
- a list of all shareholders
- if contributions in kind have been made: a non-cash formation report that quantifies the value of the contributions in kind
Shortly after registration in the commercial register, you will receive a "tax registration questionnaire" from the tax office. You fill this out and send it back to the tax office together with the required documents (e.g. the extract from the commercial register and the articles of association). You can easily complete this step online. You can find out how it works in this article.
Now register your GmbH with the trade office. Registering the company with the Federal Employment Agency, the Chamber of Industry and Commerce (IHK) or Chamber of Crafts (HWK) and the employers' liability insurance association concludes the company formation complete.
How long does it take to set up a GmbH?
Depending on your preparation and the pace of work of the authorities involved, you should normally expect at least 3 to 4 weeks for the formal company formation. In addition, there is the extensive planning phase and the preparation of the necessary documents. Here we explain why a GmbH formation can be delayed despite careful planning and how you can avoid delays.
With Recht 24/7, you will receive all the documents for the company formation in 24 hours. We can also arrange the notary appointment immediately if you wish.
The most important facts in brief
- Any natural person with legal capacity can set up a limited liability company.
- The company formation of a GmbH requires a partnership agreement, which must be notarized by a notary.
- The share capital of at least EUR 12,500 must be provided in the form of cash contributions prior to the GmbH formation.
- The advantages of the GmbH as a legal form: high flexibility and comparatively low taxes. With a few exceptions, shareholders are not liable with their private assets.
- The GmbH must be entered as a company in the commercial register and registered as a business.
- Our "Founding a GmbH" service offers you professional support at a fair fixed price
269.00 EURO - including advice on the start-up process
