Notary fees and tax for setting up a UG in Germany

Introduction

The UG (Unternehmergesellschaft) is not a separate legal form but a special type of GmbH (Gesellschaft mit beschränkter Haftung). Because of this, it is often referred to as a “mini GmbH”. The UG operates under the same legal framework as the GmbH, as defined by German company law.

In addition to offering limited liability, UGs share many similarities with GmbHs in terms of formation procedures and costs. Like a GmbH, a UG’s founding documents must be notarised, and the notary fees for both company types are regulated by the German Court and Notary Fees Act (Gerichts- und Notarkostengesetz, GNotKG).

📌The notary appointment is one of the key steps to set up an LLC in Germany.

Cost breakdown of UG notary fees

This itemised cost calculation assumes the UG has only one managing director and a share capital below €7,000. If the amount of share capital exceeds €7,000, the fees increase by approximately €60. Additional managing directors or a greater object value can influence the multipliers and fixed costs that form the basis for calculating the fees.

📌Please keep in mind that all figures are average prices and may slightly vary for your individual case.

UG with custom articles

Overall registration cost with customised articles

UG with standard articles

Overall registration cost with standard articles

After the notarisation, there are still further administrative costs for the founders. Here is a summary of the average costs:

What factors determine the notary fees of a UG?

Notary fees and expenses are determined by law, regulated by the GNotKG since 2013. According to § 17 of the German Notarial Code (Bundesnotarordnung), your notary is obligated to charge the legally mandated fees for their services. The most relevant factors are

• legal framework (standard or customised articles)
• amount of share capital
• the number of shareholders and managing directors

Tip: When calculating possible fees, keep in mind that small adjustments and modifications can change the basis on which the fees are calculated. There is a rate for almost all expense items that can be adjusted according to the aspect of company formation in question. The notary of your choice may also include additional invoice items. Make sure to create a reserve budget for such cases when planning the founding of your UG.

Notary invoices: items explained

What items comprise a typical notary invoice? The many different cost points can often lead to confusion. Take advantage of the following glossary for a clear overview:

Commercial register application

Only notarised applications are accepted by district courts (Amtsgericht). This means that your application must go through your notary. Changes such as modifications to the list of shareholders or managing directors or the termination of business operations must be reported. To apply, your notary will need the following information:

• Company name and contact information
• Legal company form
• Purpose and objective of the UG
• Amount of share capital
• Details on powers of representation

📌If you create a website, your register number and the location of the registry court must be included in the website’s legal disclosure or imprint.

Entry in the Handelsregister

All corporations and merchants must apply for a Handelsregister entry with their competent registry court. The register serves the public by providing information on a business’s economic circumstances. The registry court charges €150 to enter a UG into the commercial register. This fee must be paid separately.

The registry court will send the invoice to the business address you provided. Make sure that your UG’s company name is on the mailbox. If the invoice is returned to the sender, your Handelsregister entry will be delayed, unnecessarily extending the duration of the formation process.

XML files: Preparation and transmission

According to no. 22125 of the cost index provided by the Gerichts- und Notarkostengesetz (GNotKG), your notary can charge a fee for the preparation of so-called structure data in Extensible Markup Language (XML) format. This format allows for automated further processing.

Contract notarisation

If you opt to form your company with standardised articles of association called a Musterprotokoll in German, you only need to have that contract notarised. If you want (or have to) form your company with a customised contract instead of a standard one, that contract must be prepared by a notary or a lawyer. A limited-liability UG’s contract outlines the main responsibilities and rights of its shareholders.

You can opt to use a Musterprotokoll when your UG fulfils the following criteria:

• There is at least one shareholder but no more than three
• There is only one managing director
• You don’t wish to include any special provisions that aren’t already included in the text of the Musterprotokoll

Tip: Always consult with a notary or a lawyer to avoid missing any legal details. You can always replace the standard contract with a unique one, even after your UG has been formed.

Managing director appointments

If the UG has more than one shareholder, a managing director must be appointed. It is also possible to appoint more than one managing director. All provisions must be laid out in the UG’s contract/articles of association (Gesellschaftsvertrag or Gesellschaftervertrag in German).

Usually, the managing director is appointed based on a majority vote by the UG’s shareholders. If the UG only has one founding shareholder, that shareholder may appoint themselves as the managing director. The notary then comes into play to notarise the appointment. Naturally, you’ll incur fees for the notarisation.

Tip: Verbal agreements are possible, but not recommended.

Preparing the shareholder list

The preparation and notarisation of a list of the Gesellschafterliste are only necessary when there are multiple founding shareholders.

Share capital deposits

Your notary will monitor the UG’s share capital deposits and manage the transfer of the deposit slips from the bank to the registry court. The corresponding administrative fee is often referred to as a Betreuungsgebühr in German.

Publishing your commercial register entry in the Federal gazette

This expense is not part of the notary’s fees, but is still part of the formation process and should factor into your budget.

All German federal authorities must publish judicial notices in the Federal Gazette (Bundesanzeiger or BAnz). This includes new commercial register entries. Since 2012, the electronic Federal Gazette (eBAnz) has almost completely replaced the print version, leading to lower costs for disclosing company information as compared to a few years ago.

How to save notary fees when forming a UG

Using a standard contract can save you several hundred euros. A standard contract does, however, restrict your UG’s business structure. The costs you’ll save are only worth it if you are not planning to replace the standard contract with a unique one in the intermediate future. If you are, the costs of preparing and notarising the new contract will offset the money saved by forming the company with a standard contract. Take a look at the tables above for exact values.

📌Only make this discussion after weighing up all the pros and cons. Start with our guide here.

Changing shareholders or managing directors

If you need to change your UG’s contract after the fact, you need a three-fourths majority vote from the UG shareholders. Since the standard articles only allows for up to three shareholders, a unanimous vote is needed to make changes in the case of a UG formed with a standard contract. You should, therefore, think carefully about your decision before quickly deciding to cut costs with a standard contract. You’ll also need to pay notary fees to change the UG’s list of shareholders.

All figures are average prices and may vary from case to case. Additional managing directors or a greater object value can influence the multipliers and fixed costs that form the basis of these fees.

¹ Average sum

Minimising your UG’s object value

For a UG with more than one founding shareholder, the UG’s object value is not a deciding factor in calculating notary fees, as the object value in such a case is set to €30,000—regardless of the amount of share capital (ranging from €1 to €24,999), like with a GmbH. For UGs formed with one founding shareholder, however, the object value determines the rate used to calculate the fees. There are minimum fees for every service the notary performs, even when the UG is formed with only €1 in share capital. Fees do not increase linearly with increasing object value. Instead, there is a price graduation for many expense items.

If you want to form a UG with €10,000 in share capital, for example, you’ll automatically incur more costs for your notary’s services. A UG founded with no more than €7,000 in share capital and with a standard contract falls within the price category with the minimum rate for notarising shareholder contracts.