Corporate Law

§Forming a GmbH or UG

The GmbH is Germany's most popular legal form: a clear structure, limited liability, and a respected business partner abroad.

Every corporation needs minimum capital to protect creditors: €25,000 for a GmbH (§ 5 GmbHG), €50,000 for an AG (§ 7 AktG), €120,000 for an SE, payable in cash, in kind or both. The entrepreneurial company (UG haftungsbeschränkt) can be formed with €1 and suits small ventures. Which form fits depends on capital, strategy and liability.

• The articles and the formation must be notarised; German notaries can only do so in Germany.
• Registration with the commercial register (Handelsregister); the register court checks form and admissibility.
• A business account with a German bank, coordination with a tax adviser, and checking any licences and permits required.
• A GmbH has two mandatory bodies: the shareholders' meeting and the managing director(s). Shares can be sold and inherited.

§Foreign shareholders and investors

Germany offers a stable legal framework, but foreign participation raises questions of its own.

We support foreign companies entering the German market: forming a GmbH with foreign shareholders, acquiring minority stakes that secure influence while German partners keep control, acquiring majority stakes and whole companies, and joint ventures.

• Does the foreign company exist, and is it recognised in Germany? Who represents it, and how is that authority proven?
• Articles of association, investment agreements and shareholder agreements, in German and English.
• Notification and transparency obligations.
• Notarising abroad, for instance to save notary fees, carries risks: German notaries may not act there, and foreign law often has lighter formal requirements whose equivalence must be checked.

§Financing and shareholder loans

Investments and loans that are not properly secured and documented often lead to disputes years later.

Bank loans depend on the company's creditworthiness; large acquisitions are usually financed only through syndicated loans and require equity. If creditworthiness is insufficient, loans from third parties or from the shareholders themselves remain. Shareholder loans are quicker, need less security and are simpler than a capital increase (§ 53 GmbHG), but the law governing them has changed fundamentally and they may be subordinated in insolvency. Foreign investors often look only at the return and underestimate these issues.

§Holding structures

A German holding GmbH with stakes in German and foreign subsidiaries offers tax and organisational advantages.

Under § 8b of the Corporate Income Tax Act (KStG), 95 % of dividends and capital gains from shares in corporations are tax-exempt; only 5 % count as non-deductible expenses subject to corporate and trade tax. On tax structuring we work with Dr. Peter K.-D. Barandt, attorney and certified specialist in tax law (Fachanwalt für Steuerrecht).

§Shareholders, managing directors and the commercial register

We accompany companies from planning through to winding up.

• Appointing and removing managing directors; registering every change in the commercial register.
• Convening and running shareholders' meetings; preparing and reviewing resolutions; on request we attend the meeting with you.
• Disputes between shareholders: an out-of-court solution first, court proceedings where necessary.
• Directors' liability, shareholders joining and leaving, sale of the business.
• Trust agreements over shares, for instance to protect confidentiality; they require careful legal and financial structuring.
• Formation of partnerships (GbR, OHG, KG), associations and foundations.

§An outsourced legal department for small businesses

An in-house lawyer rarely pays off for a small business. A law firm that knows your business can take on that role.

Since the 2022 reform of sales law, sellers are more strictly liable, and since 28 May 2022 businesses face fines if they disregard consumer rights, such as the right of revocation, or use invalid terms and conditions. Dissatisfied customers also post bad reviews quickly. A lawyer's letter settles many disputes.

• Complaints and claims management
• Adapting terms and conditions, contract templates, revocation notices, warranty terms and product descriptions
• Reviewing, negotiating and drafting contracts, including purchasing and cooperation agreements
• Receivables management, payment orders and creditor rights in a customer's insolvency
• Commercial property and leasing agreements
• Representation in litigation