UG formation: Process, costs and services at a glance - firma.de

UG formation: Kickstart your enterprise with firma.de

Focus on growing your business right from the start.

  • Get up and running as quickly as possible
  • Form your company without having to navigate German bureaucracy
  • Receive ongoing support from a dedicated consultant
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Our UG packages: Tailored solutions for your formation

* Net price

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Our UG packages: Tailored solutions at fair prices

ClassicExpressAll-In
Services of firma.de
Timely preparation of your Trade registration (Gewerbeanmeldung)
Coordination of all necessary legal formalities
Timely preparation of your tax office questionnaire (Finanzamtfragebogen) for the application of your VAT ID (USt.-ID)
Coordination of name check with IHK/HWK
Scheduling of notary appointment in your city of choice*
An expert consultant to guide you through the process
Referral to a qualified tax adviser in your area
Checklist for incorporation
Preparation of the commercial register (Handelsregister) application form*
Completion of the trade registration form (Gewerbeanmeldung)
Letterhead, imprint and invoice templates
User friendly opening balance sheet template
Employment contract template (part-time)
Employment contract template (full-time)
Temporary personnel contract template
Internship contract template
Loan contract template
Freelancer contract template
Articles of association template
Managing director contract template
Letterhead, imprint and invoice templates
Services of the tax consultant
Services provided by Werthing Rechtsanwaltsgesellschaft mbH**
Initial consultation via telephone (30 mins/€69 net)
Other services
Free 30-day trial of meineSCHUFA premiumOPTIONAL
Obligation-free insurance check by AXA
Obligation-free business address offer by REGUS
Digital handbook for founders: Firma gründen (currently only available in German)
209€ excluding tax263€ excluding tax338€ excluding tax
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Note:
* The price is not inclusive of notary fees and the costs for entry in the Handelsregister (commercial register) as you will be charged for them separately.
** firma.de Firmenbaukasten AG does not provide legal advice itself; firma.de works exclusively with lawyers and independent tax advisors who specialise in the field of limited liability entrepreneurial companies. The 30-minute attorney consultation is carried out by the lawyer Dr Benjamin Werthmann, Günthersburgallee 37a, 60316 Frankfurt am Main. Please make an appointment: +49 611 17207-0 or by e-mail at support@firma.de.

Automate your UG formation with us

  • benefit-star

    Low starting capital

    The UG provides all the advantages of a limited liability company with only a €1.00 minimum share capital requirement. A particularly attractive corporate structure for startups and small businesses.

  • benefit-coffee

    No personal liability

    UG shareholders are not personally liable and therefore do not have to guarantee the company's debts with their private assets (e.g. house, car, bank accounts) even in the event of insolvency.

  • benefit-speed

    Tax savings

    The tax rate of the UG's undistributed earnings is significantly lower than the personal income tax rate.

Set up your business with firma.de in eight easy steps

  1. You authorise firma.de to set up your company.
  2. You receive expert advice from our consultants.
  3. We arrange your company name check with the Chamber of Commerce and Industry (IHK).
  4. We coordinate your notary appointment in your city of choice.
  5. We arrange the opening of your company bank account.
  6. We handle your company's entry into the commercial register (Handelsregister), while also preparing your trade registration (Gewerbeanmeldung) and tax office questionnaire (Finanzamtfragebogen).
  7. We refer you to one of our tax adviser partners for an opening balance sheet (Eröffnungsbilanz) consultation.
  8. You start doing business!
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Customers talk about their experiences of firma.de

Frequently asked questions about the UG

Is UG the suitable corporate form for my business?

The UG makes starting a limited liability company with low starting capital possible.

As with any limited liability company, UG shareholders' liability is limited to company assets. Claims cannot extend to the private assets of shareholders.

The UG has the lowest financial risk and the least bureaucratic hassle relative to other limited liability companies.

​What is the UG (haftungsbeschränkt) or €1 GmbH?

The Unternehmergesellschaft (haftungsbeschränkt) — commonly known as the UG — is a limited liability structure that caters to the needs of startups that have restricted starting capital (the minimum share capital is only €1.00 per shareholder) but still want to benefit from limited liability.

The UG is not a corporate form of its own, as frequently assumed, but is a variation of the regular GmbH, which was created by the legislation to Modernise the Law on Limited Liability Companies and to Combat Abuse (Modernisierung des GmbH-Rechts und zurBekämpfung von Missbräuchen [MoMiG]) in 2008.

Since its introduction, the UG or the "Mini-GmbH" has been enormously popular among founders with more than 200,000 formations already — a number that is steadily growing.

​What is the difference between the UG (haftungsbeschränkt) and a regular GmbH?

The key difference between the UG and the GmbH is the required share capital.

While founders of a GmbH need € 25,000 to incorporate their company, UG shareholders only have to provide €1.00 each to form a limited liability company.

The UG was created to remove the financial barriers facing entrepreneurs pursuing smaller ventures.

Although the UG's minimum share capital is negligible, it must reserve at least 25% of its annual profit ‬‬‪to safeguard its liability.

Why is the UG so attractive to founders?

Your required share capital is only €1.00

The UG (haftungsbeschränkt), also known as the mini GmbH, can be formed with a share capital of only €1.00. This feature makes it the ideal corporate form for startups and small businesses.

Your liability is limited to company assets

As a shareholder, your liability is limited to your corporate assets as set out in the articles of association. In other words, you cannot be held personally liable for any company debt or liabilities.

Minimal formalities during the formation process‬

Instead of drawing up customised articles of association you can choose to form your UG using a model protocol (Musterprotokoll). These model statutes combine several documents required for incorporation: the articles of association, the list of shareholders and the appointment of the managing director.

Easy conversion from mini to regular GmbH

To change the corporate form from UG to GmbH later down the track is a straightforward process. ‪Once the share capital of a UG reaches € 25,000 via building up its capital reserves, you will be able to convert it into a regular GmbH.

​How do UGs build up their capital reserves?‬

UGs are legally obligated to reserve of at least 25% of its annual net income each year. ‪Once its share capital reaches € 25,000, the obligation is lifted, and the company can readily be transformed into a GmbH.‬‬

​What is the UG share capital increase resolution (Kapitalerhöhungsbeschluss)? ‬

Should a UG's capital reserves exceed € 25,000, its shareholders can vote to increase the share capital. ‪This option has the following advantages for the company:‬

  • The ‪company may freely distribute its yearly profit‬s.
  • It can be easily converted into a fully-fledged GmbH.

Although the UG is already a special version of the GmbH, it can only use the official suffix "GmbH" after passing the share capital increase resolution.

​What is the role of a shareholder in a UG?‬

UG shareholders are not only the owners of the company but also the decision makers. Shareholders are expected to make significant business decisions during the general shareholders' meeting.

It is possible to form the UG with only one shareholder, but generally, the number of shareholders is unlimited. ‪The UG's model protocol (Musterprotokoll), however, limits the total amount to three partners. If you want to include more than three shareholders in your UG, you must use customised articles of association instead.

​What is the managing director’s role in a UG?‬

Every UG needs a managing director who is appointed by the shareholders to be in charge of managing the day-to-day business of the company and to represent the company externally.

Legally, they are employed just like any other employee in the organisation and must enter into a service contract.

In some exceptional cases, the MD may act as a sole-proprietor, but only if they have a double function as a shareholder and hold a majority stake in the company (i.e. managing partner).

If you want to appoint more than one managing director for your UG, customised articles of association must be used instead of the model protocol.

​Does the UG need a supervisory board?

The UG does not require a supervisory board unless the company employs more than 500 people or the company’s articles of association have mandated it.

​What do you need before you start your UG (haftungsbeschränkt)?‬

The UG can be formed in nearly the same way as a regular GmbH with only a few exceptions.

Just as in the formation process of the GmbH, the share capital has to be deposited, and the articles of association need to be drawn up. ‪

Since 2008, however, several documents that are obligatory for a regular GmbH have been transformed into a so-called model protocol (Musterprotokoll). Using a model protocol simplifies the incorporation process and speeds up the drafting of the articles of association.

​​What are the rules for choosing a company name?

Your UG needs to have an official corporate name. You can choose a name inspired by somebody's name, your corporate purpose or you can get creative and make something up. In every case the name suffix “UG” (haftungsbeschränkt) is mandatory, so your chosen corporate form is transparent to the public.

The four options are explored in greater detail below:

Name your company after a person‬‬‬

It is common to use the names of one or more co-founders as a company name, e.g., "Franklin Smith UG."

Create a fantasy name for your company

You may invent a word to serve as your company name, e.g., "Bribotax UG (haftungsbeschränkt)" or "Rompostomp UG".‬

Describe what your company does‬

Use a description of the purpose or the activity of your company, e.g. "Steve Baker's Online Children's Book UG" if you are selling children's books online.‬

Use a combination of the above options

You can combine two or more options, e.g., "Rompostomp – Frank Smith’s Online Book Store UG" or "Bribotax – Jill Reagan‘s Party Service UG".

Before you incorporate a UG, you should choose your company name carefully. Something to consider is the fact that many founders use fantasy terms that are not only unique - and thereby avoid copyright issues - but also pronounceable in as many languages as possible.

Most importantly, it's crucial that your company name only has positive connotations. Always consider your future customers before you make a final decision.

​How much capital must be provided when founding the UG (haftungsbeschränkt)?‬

The paid-in share capital of the UG (haftungsbeschränkt) must be between €1.00 (per shareholder) and € 24,999. The shareholders must pay the share capital after the incorporation but before the registration in the commercial register (Handelsregister).

The total share capital is the sum of the nominal shares held by each shareholder. The articles of association should explicitly articulate these amounts. The shareholders must pay the full amount in cash.

Although the minimum required share capital for a UG is only € 1.00, the upper limit is € 24,999. In practice, this figure is usually between € 1.00 and € 1,000.

‪For an accurate determination of your UG share capital, you should seek professional advice as the amount significantly influences your company's credit status and thus your liability as a shareholder.

​What if your share capital exceeds € 25,000?‬

If you want to deposit a share capital greater than € 24.999, you must form a regular GmbH instead of a UG.

​What is a model protocol (Musterprotokol)?

Any UG founder can use the model protocol (Musterprotokol) if they meet specific criteria. It was added to the GmbH law to speed up the formation process and cut down on costs.

The model protocol is a legal document that combines several statue templates (e.g. The articles of association, the list of shareholders etc.) that allows founders to skip several steps when forming their companies.

Solo founders, as well as teams of founders, can use the model protocol.

​What are the requirements for using a model protocol (Musterprotokoll)?
  • Your UG has three or fewer shareholders.
  • Your UG has just one managing director.
  • You do not have any statue special requirements that are different from the model protocol.

Additionally, as most founders form UGs with a low share capital, the model protocol contains the following regulation: If the formation costs exceed € 300 or the deposited share capital, at least one of the shareholders have to bear those costs. However, if a model protocol is used the notarial fees are much lower making this less of an issue.