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Salary for a managing director in a German GmbH: Legal limits
Summary The salary of a managing director 💬Geschäftsführer in a German limited liability company (LLC) 💬Gesellschaft mit beschränkter Haftung (GmbH) must be set at a level that is appropriate and justifiable. While there is no fixed legal cap, key criteria apply: the company must actually be able to pay the salary without jeopardising its financial …
Read moregUG in Germany explained: The non-profit version of a UG
Summary The gUG (haftungsbeschränkt) is the non-profit form of the UG, governed by the same GmbH law but serving charitable or public purposes. It can be founded with only 1 € of share capital and must retain 25 % of its annual profits as reserves. Once the equity reaches 25,000 €, conversion into a gGmbH …
Read moreWhat is a GmbH & Co. KG? Limited liability company & limited partnership explained
Summary The GmbH & Co. KG is a hybrid of a limited liability company (GmbH) and a limited partnership (KG). It offers founders limited liability, tax flexibility, and lower disclosure requirements compared to a GmbH, while remaining attractive for investors. Valuable assets can be separated for protection, and international founders can benefit from flexible management …
Read moreGbR contract: Essential information + PDF template
Summary A GbR contract defines how partners cooperate, contribute and share profits and losses within a German civil law partnership. Although a GbR can exist without a written agreement, a clearly structured contract avoids legal conflicts and strengthens accountability. Essential elements include the purpose of the partnership, voting rights and exit provisions. Without these details, …
Read moreWhat is a stock company (AG) in Germany? Legal structure and key features
Summary A German stock company 💬Aktiengesellschaft is a corporation with separate legal personality and stockholder ownership in Germany. Formation follows strict rules with notarised articles, board appointments, audits, and commercial register entry. The minimum registered capital of €50,000 applies, and the AG has three corporate bodies: Hauptversammlung, Aufsichtsrat, Vorstand. Stock companies must prepare and publish …
Read moreHow do you protect a company name in Germany?
Summary The most reliable way to protect your company name in Germany is through a registered trademark. A trademark gives you an exclusive right to use your business name (or logo) in the relevant goods and services classes. Registering a name in the commercial register offers only limited regional protection; only the trademark registration secures nationwide …
Read moregGmbH: What is the German non-profit limited liability company?
Summary A gGmbH combines the structure of a GmbH with a legally defined non-profit purpose. The articles of association must clearly establish the charitable mission, and profit distributions to shareholders are prohibited. Surplus funds must be used for the defined objectives, with a beneficiary clause ensuring asset transfer on dissolution. The gGmbH is subject to …
Read moreWhat is a GmbH? The most popular German limited liability company explained
Summary The GmbH (Gesellschaft mit beschränkter Haftung) is a German limited liability company form that protects shareholders by limiting liability to the company’s assets. It requires a minimum share capital of €25,000, of which at least €12,500 must be paid in before registration. The formation process includes a notarisation, registration in the Commercial Register as …
Read moreHow does payroll accounting work in Germany?
Summary Payroll accounting in Germany involves preparing a detailed payslip for each employee covering gross earnings, taxes and social security contributions. Gross pay includes the base salary or wage plus bonuses, allowances and non-cash benefits. From this amount you deduct wage tax, church tax (if applicable) and the solidarity surcharge. In addition, you must deduct and …
Read moreTax overview for sole proprietors in Germany: How are they taxed und when
Summary A sole proprietorship 💬Einzelunternehmen in Germany is taxed as part of the owner’s personal income: the profit from the business is subject to income tax, including the solidarity surcharge and possibly church tax. If the business is a commercial trade, it also pays trade tax (liberal professionals 💬Freiberufler exempt) and is generally liable to value-added …
Read moreCost of setting up a UG in Germany: How much do you need?
Summary Setting up a UG (haftungsbeschränkt) typically costs between €540 and €1,200. The main factors influencing the total are the formation type (standard vs. custom articles), your chosen share capital, and the number of founders and managing directors. Small adjustments can quickly increase your bill, so it’s smart to plan a buffer for unexpected fees. …
Read moreHow to register a UG in Germany: Checklist for founders
Summary An Unternehmergesellschaft or UG offers limited liability that requires minimal start-up capital. Unlike a Gesellschaft mit beschränkter Haftung (GmbH), you can set up a UG with as little as €1 in share capital. Using standard articles can further reduce costs and effort. The formation process includes determining a registered office and company name, depositing …
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