How to set up a gGmbH: Your guide to starting a non-profit company in Germany

updated on 16. January 2023 8 minutes reading time
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In Germany, the gGmbH is one of the most popular legal forms in the cultural, educational and care industries.

Setting up a gGmbH is easier than you think. If you want to pursue entrepreneurship for a social or non-profit cause, it’s the legal form for you.

Don’t know what a gGmbH is exactly? Start here.



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Andreas Munck

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Got questions about setting up a business in Germany? 

  • Startup expert
  • 10+ years experience

Hi, I’m Andreas and I’ve been advising businesses in Germany for over a decade. I’d be happy to call you and answer any questions you have in a one-on-one consultation.



1. Things to consider before forming a gGmbH

A gGmbH gives all the entrepreneurial advantages of a GmbH with the benefits of a non-profit status. No wonder that one third of the employees in the non-profit sector now work for a gGmbH.

In our step-by-step guide you will learn how to set up a gGmbH and benefit from the entrepreneurial advantages.

But before you do anything else, it’s time to make some fundamental decisions.

The Geschäftszweck (company purpose) of the gGmbH

Determine the charitable purpose (gemeinnützige Zwecke) before forming the gGmbH. The purpose must be non-profit, charitable or religious.

Be sure that can you pursue the purpose as simply and cost-effectively as possible. After all, the more resources and time you save in your endeavour, the more resources you will have for other charitable projects. Logo (transparent)

Set up a gGmbH in the fastest time possible.


Legal requirements

In order to be able to fulfil their non-profit purpose, they often need a number of certificates and permits. Especially in the field of care and educational institutions, the increased staffing cost should not be underestimated.

Stammkapital (share capital)

Come up with a strategy on how you to raise the share capital and how much you need to set up the gGmbH.

Gesellschafter (shareholders)

Who should set up the gGmbH with you? How many shareholders should you appoint to achieve your mission? Sometimes, too many cooks spoil the broth.

Also consider that you and the partners should be a good match, both professionally and personally, and that they should all pursue the same goal.


2. Company statues (articles of association)

The second step in setting up your gGmbH is to draft the articles of association. The non-profit purpose must be defined in the articles of association. It is the most important component for the recognition of the non-profit status by the tax office.

In order for the tax office to recognise the non-profit status, the following criteria must be met.

Unmittelbarkeit (Directness)

The profits generated must flow directly and immediately to the charitable purpose.

Selbstlosigkeit (Altruism)

All funds generated must be used altruistically for the charitable purpose. A distribution of profits to the shareholders is not permitted. Furthermore, all salaries must be in relation to the services rendered to the non-profit limited liability company.

Begünstigter (Beneficiary)

The company statutes (articles of association) of your gGmbH must specify a beneficiary non-profit organisation. In the event of dissolution of the gGmbH, this organisation will receive the surpluses generated. The share capital is paid out to the shareholders.

The charitable purpose should be carefully formulated, as it will determine whether the tax office will grant your company provisional charitable status. Due to this individual customisation, it is not advisable to use a the standardised/template statutes, because if the gGmbh statute is rejected by the tax office as not being non-profit, it will have to be drawn up again. This can be very expensive. Because the non-profit status complicates things, get a lawyer to help you draft the company statutes and get it right at the first go.

Next, you must state your desired company name in the company statutes. When choosing this name, it is important to follow some basic rules.

3.Review by the Finanzamt (tax office)

After the articles of association have been drafted, you should submit them to the relevant tax office for examination. In most cases, the authorities will return the document with suggested changes or comments. Don’t visit a notary (the next step in the formation process) until you get the green light from the tax office.

Once the notary notarises the company’s articles of association, your company is now “gGmbH in Gründung” or “gGmbH i.G.”. What this means that your company is “in formation” and is not incorporated yet. Logo (transparent)

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4.  Geschäftskontos (business business account) and Stammkapital (share capital)

As soon as your non-profit limited liability company has been notarised, the notary will send you the gGmbH formation documents. With these documents you then go to the bank to open the company account and pay in the share capital of your gGmbH. As a rule, the share capital of a gGmbH must be at least €25,000. The share capital is usually paid in cash or as a contribution in kind by several shareholders.


5. Entry into the Handelsregister (commercial register)

Once the share capital has been paid in, the notary can enter the non-profit GmbH in formation in the commercial register.

With this step, the non-profit GmbH is incorporated and the limitation of liability comes into effect.


6. Steuerliche Anmeldung (Tax registration)

One of the first duties of the shareholders of a non-profit GmbH is to register with the local tax and trade office. The following documents must be submitted to the tax office:

  • Completed tax registration questionnaire (Fragebogen zur steuerlichen Erfassung)
  • Articles of association/company statutes of the gGmbH (Satzung der gGmbH)
  • Extract from the commercial register (Handelsregisterauszug)
  • Opening balance sheet (Eröffnungsbilanz)

This is also where the decision is made on the provisional granting of non-profit status to your gGmbH. Non-profit status is always granted retroactively. For example, you will not be granted non-profit status for 2021 until 2022.

Now your gGmbH is fully operational!


[BEGIN: Insert an Image between this tag]

Andreas Munck

[END insert Image]

Got questions about setting up a business in Germany?

  • Startup expert
  • 10+ years experience

Hi, I’m Andreas and I’ve been advising businesses in Germany for over a decade. I’d be happy to call you and answer any questions you have in a one-on-one consultation.


The Master list of all Company Formation articles can be found here.

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