Forming a UG: Should I use the calendar year as my company’s financial year in Germany?

updated on 15. July 2021 5 minutes reading time
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A financial year that differs from the normal calendar year allows entrepreneurs to prepare their year-end financial statement at a time of their choosing instead of at the end of the calendar year. This enables them to concentrate on what is often the most lucrative time of year. Businesses formed shortly before the end of the calendar year can benefit from a differing financial year as well.

The basics: What is a Geschäftsjahr (financial year)?

The Geschäftsjahr (financial year) is defined in the German Commercial Code (Handelsgesetzbuch – HGB). It normally lasts twelve months and is sometimes referred to as a business year or fiscal year (Wirtschaftsjahr or Fiskaljahr). The financial year begins with an opening balance statement (Eröffnungsbilanz) and ends with a year-end financial statement (Jahresabschluss). The financial year of a UG or GmbH normally ends on 31 December, together with the calendar year.


Possible deviations

The end of the financial year is generally set to coincide with the end of the calendar year if a company used model articles of association (known as Musterprotokoll in German). Bespoke articles of association, however, offer entrepreneurs the chance to choose an alternative financial year, which could end on 30 June to be in-line with other countries fiscal years, for example.

If forming a UG at the end of the year, it can be an enormous relief for a new entrepreneur to be able to prepare their first year-end statement (annual accounts known as Jahresabschluss in German) later instead of having to do so just a few weeks after their company’s incorporation. This can be a good way to save time and money that can be better invested in the new UG right away. Seasonal influences can also be a good reason for choosing a differing financial year. It would be advantageous, for example, for a UG in the winter tourism sector to be able to prepare their Jahresabschluss during the summer.

It is important to note that forming a company with bespoke articles of association will mean higher notary fees for the founder. In return, each individual point in customised articles of association can be tailored specifically to the UG and its shareholders, defining how aspects from voting rights to profit distribution to share sales will be regulated.


Advantages and disadvantages of a differing financial year


  • The ability to postpone the preparation of the Jahresabschluss to a more optimal time for your business.
  • If you must incorporate at the end of the year, changing your company’s fiscal year can allow more time to generate revenue to cover the accountancy fees.
  • Allowing you to defer paperwork and administrative work during your business’s off-season.



When does it make sense to opt for a differing financial year?

To determine whether or not a non-calendar fiscal year makes sense for your UG, you should ask yourself the following questions:

  • Will the UG be formed shortly before the end of the calendar year?
  • Will the UG most likely be recording especially high revenue figures around the end of the calendar year and don’t want to be weighed down with heavy administrative work at this time of the year?
  • Will the UG be appointing multiple managing directors, for example, making customised articles of association necessary anyway?


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The information published on our site is all written and checked by experts with the greatest care. Nevertheless, we cannot guarantee the accuracy of this information, as laws and regulations are subject to constant change. Therefore, always consult an expert in a specific case – we would be happy to connect you with the right professional. assumes no liability for damages caused by errors in the texts.

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