How to register a UG in Germany: Checklist for founders

GmbH vs UG — What’s the difference?

Both the UG and GmbH are corporations 💬Kapitalgesellschaft under German law, meaning they are separate legal entities whose shareholders have limited liability. Whether you are going to register a UG or GmbH, the steps are identical. Plus, both are subject to the same corporate governance provisions.

However, the UG was introduced to make it easier and cheaper for anyone to start a business in Germany. The trade-off is certainly a lower credit standing with investors and banks as well as obligatory profit retentions.

If you think the GmbH is the better choice for you, read our blog post on how to set it up here.

Key requirements for forming a UG

• At least one shareholder 💬Gesellschafter , i.e., natural or legal person
• At least one managing director (MD) 💬Geschäftsführer
• German business address 💬Geschäftsadresse
• Valid company name 💬Firmenname and company objective 💬Unternehmensgegenstand
• Equity to cover share capital plus formation costs

Costs of starting a UG

UG with standard articles 💬 Musterprotokoll

• Solo founder: approx. €531 + share capital
• Multiple founders: approx. €617 + share capital

UG with custom articles 💬Satzung

• Solo founder: approx. €1,171 + share capital
• Multiple founders : approx. €1,181 + share capital

📌 These prices include the average fees for the notary, commercial register, transparency register and trade office. Legal advice or custom articles cost extra. Find a detailed breakdown of the notary fees here.

How to register a UG step by step

The formation of a UG follows a clear sequence of steps. While similar to the GmbH process, each step must be completed in order to satisfy German company law and the relevant authorities.

Step 1: Select founders and management

Who will be the shareholders and who is going to manage the new company? Every UG must have at least one of each. MDs can be shareholders or employees.

Next, decide on the share capital 💬Stammkapital and —if you are a team— your individual contributions 💬Stammeinlagen. Most UGs start off with €1.000-2.000 to reduce the risk insolvency as soon as the first invoices are due.

Remember that each shareholder needs to deposit their full cash contribution before the new company can be registered.

💡International founders: Choose a bank for your mandatory UG business account as early as possible. The process can be time-consuming depending on your nationality, as German banks apply strict know-your-customer checks. Some institutions may refuse customers from countries under EU sanctions, involved in disputes with the EU, or classified as high-risk regions.

Step 2: Pick a name and define business activities

Your UG needs an official name 💬Firmenname that ends in ‘UG (haftungsbeschränkt)’ that is distinguishable from existing companies in the register. These are our 3 golden rules:

1. The name may contain the founders’ names and/or the sector, e.g., Sayed Auto Repair UG (haftungsbeschränkt)
2. If you mention an industry or sector it’s important to add a unique identifier, e.g., FTG Kosmetik UG (haftungsbeschränkt)
3. Never use offensive, misleading or exclusively descriptive terms, e.g., Deutsche Manufaktur UG (haftungsbeschränkt)

In addition, define your company objective, i.e., its activities. Follow these guidelines to get started. Now it’s time to get the name and objective pre-aproved by your local Chamber of Industry and Commerce 💬 Industrie- und Handelskammer (IHK). This free service—with a few exceptions like Berlin—ensures compliance with the naming laws or rules out any confusion with existing businesses in the area.

Step 3: Choose your articles

Next, you have an important choice to make: Using standard articles 💬Musterprotokoll or custom articles 💬Satzung.

📌 The Musterprotokoll is a standardised template for forming a GmbH or UG, combining the articles of incorporation, shareholder list and managing director appointment into a single document. Think of it as a fill-in-the-blank form provided by the government that already includes all the basic company rules and details. It speeds up the formation process but its clauses mustn’t be changed or expanded. Custom articles allow more flexibility but are also more costly.

Before you invest time in weighing the pros and cons of each option, check whether your UG meets the requirements for using standard articles:

• No more than 3 shareholders
• No more than 1 managing director
• Standard financial year ending 31 December

Read our detailed comparison here.

Step 4: Schedule a notary appointment

Under German law, the formation documents for corporations must be notarised. Only then the notary files the registration in the commercial register 💬Handelsregister.

Before you schedule an appointment, check if you’ve sorted out the following points: shares and posts, business address, company name und objective, and articles. The notary will either draft your standard articles and fill in the details, or check your custom articles in advance. Read a detailed FAQ on your notary visit here.

All founders and managing directors must appear before a notary in person or by proxy. For the appointment itself you’ll need a valid ID card or passport, or notarised power of attorney.

Step 5: Open a bank account and deposit capital

Once you have notarised documents, open a bank account in the UG’s name. Deposit the contributions in full. Then obtain a deposit confirmation.

📌 The sooner you complete this step, the better. You’ll need proof of payment to register your UG in the commercial register, secure limited liability and apply for a tax number.

Step 6: Submit proof of payment

This is a big one: Send the bank statement to the notary so they can finalise the application to the commercial register.

Now is the time to put the company’s name on the letterbox of its official address so you can receive the invoice for the commercial register entry.

⚠️ Don’t fall for a very common invoice scam and check your invoices very carefully before making any payments.

Step 7: Wait for entry in the commercial register

Depending on the location, it may take some days or even a few weeks until the registry court 💬Amtsgericht / Registergericht processes your application. Don’t forget to pay the invoice after you’ve confirmed its authenticity.

📌 You can check the official website to monitor the date of publication.

Step 8: Register with the trade office, tax office, transparency register

📌 All follow-up registrations must be completed within four weeks, and it’s the managing director’s responsibility to take care of them.

First, you must register the UG at the local trade office 💬Gewerbeamt—the only exceptions being non-operational LLCs. The registration fee is usually between €20 and €60.

Next, tax registration: Use ELSTER to apply for tax number 💬Steuernummer. If your company is going to trade across EU borders, also apply for a VAT ID 💬USt-IdNr.

Finally, every UG is required to list its beneficial owners in the transparency register 💬Transparenzregister. This can be done online and costs about €20 annually.

Step 9: Start your operations

With its newly issued tax number, your Unternehmergesellschaft is officially in business! Add the number to your official letter head and imprints. Now you’re ready to create valid invoices and reclaim input VAT.

Step 10: Set up your accounting

Double-entry bookkeeping is mandatory and complex. Prepare an opening balance sheet and get familiar with all monthly and annual accounting obligations. Secure a tax consultant now in case you need support. Most corporations are unable to prepare their annual financial statement without a reliable service.

📌Remember: Fixing your botched accounting comes at a steep price. Tax consultants are not a luxury but a necessity to do it properly.

Pros & cons of a UG (haftungsbeschränkt)

Timeline & roadblocks for setting up a UG in Germany

The formation process and business registration typically takes 4 to 6 weeks, but this can vary widely depending on several factors:

📒 Prep work: Familiarise yourself with all the necessary information. Check out ELSTER and other documents. Do you need help with your German? If so, get some support by a native speaker so things can move quicker.

📜 Additional paperwork: Some businesses in Germany require a special license or permit (e.g. consulting, employee leasing, security). Processing times can be lengthy so start filing the paperwork asap.

🏢 Place of business: Search for a registered office address early on. Without one, the registration process will get stuck in the early stage.

⚖️ Notary availability: In metropolitan areas such as Munich, Berlin or Stuttgart, timely notary appointments can be harder to come by. Be flexible and get ready to make a short trip.

🏖️ Response times: The chambers of commerce, banks and courts slow down during holiday or flu seasons, i.e. January, July, August and December.

📫 Lost communication: Missing an important email or invoice can delay your registration significantly. Be sure to check both digital and physical inboxes regularly.

Even if delays occur, having a solid checklist, information from a reliable source and a partner like firma.de helps keep your UG formation on track.

Frequently asked questions

Can I set up a UG on my own?
Yes, that’s common. Solo founders usually take on the role of managing director as well.

Can I form a UG from abroad?
Yes, but you’ll need a German business address. If none of the founding team are German, EU or EFTA citizens, or holds a settlement permit, registering a UG will become more complicated.

When is it better to delay forming a UG?
If you plan to use standard articles, it’s best not to establish your UG right before year-end. A UG must still prepare an annual financial statement as of 31 December, even if it has only been operating for a short time. This can lead to accounting expenses of roughly €800 to €2,000 for just a few weeks of activity. The only way around this is to opt for custom articles, but having these drafted and notarised will increase your formation costs by several hundred euros.

Can anyone start a UG in Germany?
You must be 18 years or older. Both residents and non‑residents can start a UG, but non‑EU founders must meet visa and residence requirements.

Who covers the formation costs?
By default, the shareholders pay the formation costs themselves. If the company is formed with custom articles of incorporation, the shareholders can agree that the UG will reimburse part or all of these expenses—usually up to a fixed maximum amount or a set percentage of the share capital. When using standard articles reimbursement is also possible, but the amount is strictly limited to €300.

How do I retain profit if the company records an annual deficit?
If the company makes a loss in a given year, there is no profit to retain, so no allocation to the statutory reserve is made for that year.

How can I convert my UG into a GmbH?
Once your UG’s share capital, together with any retained reserves, reaches €25,000, you can change its legal form to a GmbH. This process involves a shareholder resolution, amending the articles of association, and registering the change with the commercial register. Many business owners choose this step to benefit from the stronger reputation of a GmbH and to signal financial stability to clients and partners.

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 the share capital, and appointing a managing director. A notary certifies the company, which is then entered into the commercial register. Afterwards, mandatory registrations must be made with the trade office, tax office, and transparency register. Once a tax number is issued, the UG is fully operational.