Summary
A German stock company 💬Aktiengesellschaft is a corporation with separate legal personality and shareholder 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 annual accounts according to size, and IPO listing is optional. Share transfers are possible, with rules depending on the share type.
Contents
- Intro
- Formation
- Registered capital
- Corporate bodies
- Accounting & disclosures
- What has to be disclosed?
- AG shares transfers
- Is an IPO mandatory?
- Conclusion
Samar Fathulla | founder consultant
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What is an German stock corporation?
A German stock corporation 💬Aktiengesellschaft or AG for short, is a separate legal entity with its own rights and obligations, independent of the individuals who own it.
Ownership is divided into shares, which are held by the shareholders. These shareholders are the company’s co-owners, and their voting and participation rights depend on the size of their shareholding.
How to set up stock company in Germany
The process of forming an AG is subject to strict regulations laid down in the stock corporation act.
- Preparation and notarisation of the articles of association
- Acquisition of the shares by the founders
- Appointment of the board of directors, the management board and the auditor
- Preparation of the formation report and subsequent formation audit
- Deposit of contributions (cash or transfer of contributions in kind)
- Application for entry in the commercial register
Find our detailed guide on how to set up a stock corporation here.
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Registered capital
The registered capital 💬Grundkapital of an AG must amount to at least €50,000. Based on this amount, the first shares will be issued. These can be nominal shares or individual shares.
Nominal shares 💬Nennbetragsaktien are denominated at a certain value, whereby the minimum amount must be one euro, and only whole amounts are permitted. Individual shares 💬Stückaktien are not denominated in a specific amount but represent a fixed portion of the registered capital.
If 100 shares are issued, one share corresponds to one per cent of the value of the company. Whether these shares are actually issued as paper certificates or whether no individual securitisation takes place is set out in the articles of association of the AG.
Corporate bodies
A stock corporation has three corporate bodies: the annual general meeting 💬Hauptversammlung, the supervisory board💬Aufsichtsrat and the executive board 💬Vorstand .
Annual general meeting
The general meeting represents the shareholders, exercises their rights and is convened once a year. An extraordinary general meeting can also be held if necessary for the good of the company.
The decisions taken at the general meeting generally have nothing to do with the company’s day-to-day operations but rather with organisational issues, such as the appointment of members of the board of directors, capital reductions and increases, and the allocation of profits. However, the executive board may ask the shareholders to decide on an operational issue to safeguard themselves.
Supervisory board
The supervisory board is the company’s controlling body. It appoints and dismisses the executive board and the auditor, reviews the annual financial statement and submits them to the executive board.
In addition, the supervisory board has access to the company’s books at all times to perform their supervisory functions.
Executive board
The executive board is responsible for the operational business of the stock corporation.
It’s self-sufficient and independent of the supervisory board and the general meeting.
The executive board represents the company externally, whereby the power of representation is unlimited but, in principle, only effective as a joint power of representation. Individual members can only effectively represent the company if the articles of association state that they have sole power of representation.
Accounting and disclosure requirements
For German stock companies, there are clear rules regarding the composition and publication of the annual financial statement.
The annual accounts include the balance sheet, profit and loss account, and notes, but not the management report. An AG is obliged to publish its annual accounts, the scope of which depends on the company size.
Commercial register
Certain transactions and changes in a stock company must be submitted to the commercial register. These include, for example, the formation of the stock corporation, the first executive board and the first supervisory board, personnel changes in the committees and the respective annual financial statements of the company.
Transferring shares
If shares are transferred from one holder to another, no special form is required. However, the type of shares must be taken into account. A non-securitised share, for example, can be transferred by assignment. In the case of “restricted” registered shares, however, approval must be given at the general meeting.
IPO
To trade the shares on one of the international stock exchanges, the AG must first go through the initial public offering process. This requires compliance with certain legal requirements laid down in the stock exchange act and the stock exchange admission ordinance.
Being listed on the stock exchange also creates additional disclosure requirements.
Conclusion
Choosing an stock company suits ventures that plan equity financing and clear governance in Germany. Expect tighter governance and ongoing disclosure obligations, balanced by access to capital and transferability of shares. An IPO is not mandatory, but preparation for public-grade reporting helps. Secure expert support for articles, board setup, and filings to avoid delays.
