Getting Familiar With The Features Of Forming A Company In Germany

Germany is one of the leading economies of the world, which is why it is not really surprising that the country is known to attract significant foreign investment as well as business. Being the second largest importer in the world, Germany offers a huge scope for trading which make it a great destination for setting up a business. In addition, the fact that the economic opportunities are scattered across different regions within the country, further makes it a preferred choice for investors seeking an opportunity for forming a company in Germany. However, before starting the process of establishing their business in the country, it is essential for the aspiring entrepreneurs to familiar with the below discussed key aspects of this process.
 Forming A Company
A Basic Overview Of Company Formation

The German law provides for the established of different types of companies within the country. These are primarily categorized as limited companies, joint companies and other types of companies. There are five main types of companies that can be formed by investors within the provisions of the law. These are explained in brief as follows.

German UG : This type of company is similar to an English Ltd company and is often referred to as “mini GmbH”. This is the most popular choice for setting new businesses and can be established with a capital investment of just €1 and the formation of such companies can be completed within a period of one week.

German AG – Joint Stock Company : This type of company is generally formed by large businesses and publically traded companies. Formation of an AG company requires a minimal investment of €500 and while the company is managed by a board of directors, a separate board is set up to supervise them. It is also mandatory for an Ag company to get its accounts audited by a registered auditor.

German KG – Limited Partnership : A KG type company is generally formed with the collaboration of two or more partners.  The parnerts can be either silent or active and while silent partners can be held liable only for the capital invested, the active partners are responsible for every business activity. However, the silent partners do not have any say in the day-to-day working of the business.

German GmbH : This type of company is also known as a private limited liability company and is the most preferred type of company in Germany. The capital required for forming a GmbH in Germany can be brought in the form of cash or assets. The value of the underlying assets brought into the company must be presented in the company articles of association. However, the shares of such companies cannot be listed on the stock markets and the shares may not be traded publicly. The day-to-day decisions of such companies are made by the corporate director, who is appointed by the meeting of shareholders.
Location: Germany

Comments

Post a Comment

Popular posts from this blog

Challenges Faced By Organizations In Managing Human Capital Efficiently

Image
Businesses, especially the ones in their initial growth stages, have to numerous challenges. While most organizations consider cash flow, revenue growth and competition to be the major problems they need to tackle, only a few realize that it is actually the efficient management of human capital that can prove to be the biggest issue they are likely to face. This is due the fact that the process of managing human capital is generally quite complicated and often requires a lot of planning. The process is completed in multiple stages and tends to be quite expensive, tiring and time-consuming. That is why it is not uncommon for business organizations to hire the services of a professional PEO company Germany for managing human capital. Discussed below are the six key challenges faced by business organizations while managing human capita and how a PEO company can help solve them. Attract Top Talent Skill shortage has emerged as one of the biggest problems being faced by busi...
Read more

Setting Up A GmbH In Germany - The Essential Checklist

Image
Are you considering setting up a GmbH in Germany ? Have you fulfilled all the necessary requirements? Forming a GmbH in Germany requires completion of a number of legal formalities. To save hours of yours from researching what all to compile, here is your neat checklist: Choose The Right Company Form The company type should be dependent upon the line of business the company will be dealing in. Thus, before incorporation, ensure that the said company form is right in terms of the purpose of your company. Check if you are having sufficient amount of capital to invest in the GmbH. The minimum capital requirement for a GmbH company is € 25,000, half of which is required to be deposited immediately. Company Name You may already be having a name in your mind, but to check its availability, you need to check in the commercial register. If the name is already taken, you need to think of something else. Company’s Objective As per the German law, the individual shoul...
Read more

Company Formation In Germany – Understanding The Various Aspects Of Taxation At Shareholder Level

Image
Germany has become a preferred destination for entrepreneurs looking to set up a business in Europe. Like most other nations, the country also has its unique taxation laws, which the individuals intent on forming a GmbH in Germany need to abide by.   The taxation is done mainly at two levels, namely the company level and the shareholder level. While most overseas entrepreneurs are aware of the former level taxation, they possess little or no knowledge about the latter one. This problem can be overcome by learning about the various aspects of taxation at shareholder level as explained below. Taxation On Profit Distribution The profits earned by a GmbH are distributed amongst its shareholders who are liable to pay income tax for the same as it represents income from capital. In such cases, a flat rate, withholding the tax rate is applicable, according to which the profit distributions from shares in the company being held as personal assets by the shareholders are subject...
Read more