Size classes according to the HGB (German commercial code): Rights and obligations for limited liability companies

The Größenklassen (size classes) defined in the HGB (commercial code) serve to regulate accounting and publication for incorporated companies. The larger a capital company is, the stricter the requirements for auditing and the more detail required when disclosing the business data. Find out which size classes are available and which specifications you must have in mind.


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Größenklassen: What are size classes in the commercial code?

The four size classes are defined in the HGB (commercial code) for accounting law. They are used for corporations, including the GmbH, the UG and the AG. The size classes are also applied to partnerships without a natural person as a personally liable shareholder (GmbH & Co. KG, UG & Co. KG).

The size classes determine how the accounting requirements of a corporation are governed. This is of particular importance when you are preparing and publishing the financial statements, which determines the scope of disclosure. In general, the larger the company, the higher the requirements for the following areas:

  • Financial reporting (Rechnungslegung)
  • Auditing requirement (Prüfungspflicht)
  • Disclosure (Offenlegung)

Separate size classes exist for commercial partnerships in which natural persons are liable. However, they differ not only in terms of size classes for corporations but are also specifically regulated in the German Publicity Act (Publizitätsgesetz – PublG).


Structure of the size classes

In § 267 HGB, four size classes are defined: micro-company, small company, medium-sized company and large company. For each size class, at least two of the three thresholds listed for each class should not be exceeded. The thresholds are as follows:

  • Balance sheet total (Bilanzsumme)
  • Average number of employees
  • Revenues (twelve months before the balance sheet date)

The thresholds were changed in 2016 with the German Accounting Directive Implementation Act (Bilanzrichtlinie-Umsetzungsgesetz – BilRUG).

The average number of employees is based on the following formula:

(Number of employees in the company on March 31 + number on June 30 + number on September 30 + number on December 31) / 4

NB. Trainees are not counted.

Revenues are calculated as follows:

Proceeds from sales, rental and/or lease + provision of services of the corporation – sales deductions – sales tax – other taxes related to sales

The size classes are structured as follows:

Determining characteristics Micro Small Medium Large
Balance sheet total (Bilanzsumme) €350,000 €6,000,000 €20,000,000 > €20,000,000
Revenues (12 months before the balance sheet date) €700,000 €12,000,000 €40,000,000 > €40,000,000
Number of employees on an annual average 10 50 250 > 250

It should be noted that the size class of a company only changes if the determining size characteristics change at the end of the subsequent two financial years. This rule prevents the disclosure requirements from changing too often.

In most cases, or if it has not been individually regulated, the same special rules apply to micro and small capital companies. The regulations in § 267a para. 2 of the HGB (commercial code) apply. Special facilities for micro-capital companies are provided and defined in § 264 para. 1 sentence 5 (waiver of attachment under certain conditions) and § 266 para. 1 sentence 4 HGB (condensed balance sheet).

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Exceptions to the size class rule

In manchen Fällen werden die Größenklassen nicht auf Kapitalgesellschaften angewendet. So werden kapitalmarktorientierte Kapitalgesellschaften nach § 264b HGB (z. B. börsennotierte Aktiengesellschaften) immer wie Großunternehmen behandelt, auch wenn es tatsächlich kleinere Unternehmen sind. Auch Kreditinstitute und Versicherungsunternehmen erhalten keine größenabhängigen Erleichterungen (§ 340a Abs. 1 HGB, § 341a Abs. 1 HGB).

The following companies apply according to § 267a para. 3 HGB generally not as a micro-capital company:

  • Investment companies (§ 1 para. 11 of the German Capital Investment Code/Kapitalanlagegesetzbuchs)
  • Corporate investment companies (§ 1a para. 1 of the German Law on Private Equity Companies/Absatz 1 des Gesetzes über Unternehmensbeteiligungsgesellschaften)
  • Holding parent companies (§ 1a para. of the German Law on Private Equity Companies)

Furthermore, domestic parent companies (in accordance with § 290 I and II HGB) are exempted from the obligation to prepare corporate annual accounts. A condition is that one of the following occurs:

  • Total assets of parent companies and subsidiaries: up to € 23,100,000
  • Revenues: up to € 46,200,000
  • Average number of employees: up to 250


  • Balance sheet total after deduction of the underage: up to € 19,250,000
  • Revenues: up to € 38,500,000
  • Average number of employees: up to 250

These rules do not apply if the parent company or one of the subsidiaries is capital market-oriented at the balance sheet date. The company is considered capital market-oriented if it sells securities through an organised market or has applied for entry (see §264d HGB). This is the case, for example, with listed stock corporations.

Rechnungswesen: More on the basics

Duties & facilities of the different size classes

Each corporation must submit certain documents to the electronic Federal Gazette (Bundesanzeiger). Depending on the size class, different requirements apply:

  • Deadline and structure for the annual accounts (Jahresabschluss)
  • Scope of mandatory information in the notes and management report  (Umfang der Pflichtangaben im Anhang und Lagebericht)
  • Audit of the Jahresabschluss
  • Disclosure of the Jahresabschluss

Micro-capital companies have the option of submitting a condensed balance sheet and a simplified profit and loss account for accounting. Under certain circumstances, no notes are required, but the balance sheet details must be more detailed. There is no auditing requirement.

Small companies must disclose their balance sheet and their notes. The profit and loss account is not mandatory. In addition, the audition requirement is dropped.

Medium-sized companies must present the balance sheet in the same form as small-cap companies and add additional information. There is also a shortened appendix. The additional information is treated in the same way as with large capital companies. The annual financial statements and management report must be audited by a certified accountant or auditor per the provisions of § 316 et seq. HGB.

Large corporations must disclose the annual accounts, the balance sheet and an income statement. These include the notes, the management report and an audit certificate or note detailing its refusal. Furthermore, a report from the supervisory board, the declaration of compliance from the management board and the proposal for the appropriation of profit must be added. As with medium-sized corporations, there is an obligation to audit the annual accounts and the management report.

Failure to disclose your company’s data will result in fines and other punitive measures. In that case, the electronic Federal Gazette informs the German Federal Office of Justice (BdJ). You will be given a period of six weeks to submit the missing documents. If the deadline is not met, the BdJ initiates a fine-filing procedure which can amount to between €2,500 and €25,000. A procedure is then started both against your corporation and you. And you’ll also have to pay the legal costs.

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