Set up a UG. From €1 share capital.

You form a UG (haftungsbeschränkt) at the notary just like a GmbH, only with less capital: from €1 share capital (Stammkapital), paid in full and in cash before the registration. Notary and commercial register cost €464.89 with the sample protocol (Musterprotokoll) and one founder, and €1,118.20 with articles of association and two founders.

1. 1

   Decide on the share capital. How much does each founder put in? The law asks for €1, but more makes sense, see share capital. Every shareholder takes at least one share of €1.

2. 2

   Choose a name with the suffix. The name ends in “UG (haftungsbeschränkt)” or “Unternehmergesellschaft (haftungsbeschränkt)”; no other abbreviation is allowed (§ 5a Abs. 1 GmbHG). Whether it is free shows our company name check.

3. 3

   Sample protocol or articles. Up to three shareholders and one managing director can use the sample protocol. It also decides how much of the formation costs the UG may bear, see sample protocol.

4. 4

   Notarisation. At the notary's office or by video call (§ 2 Abs. 3 GmbHG). Until it is registered, the company trades as “UG (haftungsbeschränkt) i. G.” (in formation).

5. 5

   Pay in the full share capital. Into a business account of the UG, before the notary files the registration (§ 5a Abs. 2 GmbHG). You can compare providers under business accounts.

6. 6

   Commercial register. The notary files the UG electronically; it comes into existence when it is entered (§ 11 Abs. 1 GmbHG). The responsible court is listed in our commercial register directory.

7. 7

   Tax office, trade office, transparency register. The registrations with the authorities follow, see obligations after formation.

With firma.de the notarisation is usually possible within 48 hours; how fast the entry follows depends on the registry court. You find our package under pricing.

With the sample protocol the notary fee depends on the share capital, and small amounts pay the minimum fee: whether €1 or €5,000, one founder pays €464.89 for notary and commercial register. With articles of association the notary assumes a business value of at least €30,000, so a UG costs as much as a GmbH.

On top come the trade registration, usually €20–65 depending on the city, €19.80 a year for the transparency register and the basic IHK fee of €60–360. For comparison: a GmbH with the sample protocol and one founder costs €590.55. Every item and your city are in our formation cost calculator (in German).

Legally, €1 is enough (§ 5a Abs. 1 GmbHG). Unlike a GmbH, the whole share capital must be paid in before the registration, and only in money: contributions in kind are excluded (§ 5a Abs. 2 GmbHG). You cannot contribute a car, a laptop or your existing sole proprietorship.

Why €1 rarely makes sense:

• The formation costs stay with you. The UG may bear formation costs only up to the amount of its share capital. With €1 you pay €463.89 of €464.89 privately, with €1,000 only €164.89.
• The UG is over-indebted at once. The first account fee already exceeds a capital of €1. On the balance sheet the UG is then over-indebted; under insolvency law that counts as soon as there is no positive going-concern forecast (§ 19 Abs. 2 InsO). If you fill the gap with private loans, document them properly.
• Every founder needs a share. Shares are stated in whole euros (§ 5 Abs. 2 GmbHG). Two founders need at least €2, and a small capital can hardly be split for later investors or employees. How shares dilute shows our cap table calculator.
• Business partners take note. The share capital is in the commercial register. Banks, landlords and suppliers read €1 as a sign that nothing is there in an emergency, and are more likely to ask for a personal guarantee.

A sensible amount covers the formation costs and the first months; with the sample protocol it costs nothing extra at the notary. Careful when spending it: if the UG soon uses the share capital to buy something from a shareholder, this can count as a hidden contribution in kind. Whether its value is then credited as for a GmbH (§ 19 Abs. 4 GmbHG) is disputed for the UG; in the worst case you owe the contribution again.

The sample protocol (Musterprotokoll, annex 1 to the GmbHG) is the statutory template for up to three shareholders and one managing director (§ 2 Abs. 1a GmbHG). For a UG it is usually the first choice, because the notary then charges on the actual share capital instead of €30,000: with one founder and €1,000 it saves €565.25 against articles of association, without escrow fee.

Item 5 of the sample protocol covers the costs: the company bears them up to €300, at most up to its share capital. With its own articles a UG may, according to case law, take on formation costs up to the amount of its share capital; with €1,000 it bears €1,000 of €1,107.49. If the deed says nothing, the founders pay everything themselves.

If you found together and want to agree what happens when someone leaves, individual articles of association are worth it. For a UG they cost the same as for a GmbH.

The company name must carry the suffix “Unternehmergesellschaft (haftungsbeschränkt)” or “UG (haftungsbeschränkt)” (§ 5a Abs. 1 GmbHG). “haftungsbeschränkt” must not be abbreviated; the registry court will not enter “UG (h)”, “UG mbH” or “GmbH”. In front of it stands a name that differs from other companies in the same place and does not mislead (§ 4 GmbHG).

The suffix also belongs on invoices, letters, emails and in the imprint (§ 35a GmbHG). Whoever acts for a UG as a “GmbH” or without the suffix may be personally liable to business partners, because they create the impression of a €25,000 minimum capital (BGH, II ZR 256/11).

As long as the share capital is below €25,000, the UG must put a quarter of its annual net profit into a statutory reserve, reduced by a loss carried forward from the previous year (§ 5a Abs. 3 GmbHG). There is no cap and no deadline; the duty ends only with the capital increase to €25,000.

An example: with an annual net profit of €40,000, €10,000 stays in the reserve and the shareholders decide on €30,000. The UG may use the reserve only:

• for a capital increase from company funds (§ 57c GmbHG),
• to offset an annual loss not covered by profit carried forward,
• to offset a loss carried forward from the previous year not covered by an annual net profit.

It must not be distributed. A reasonable managing director's salary reduces the net profit beforehand and is therefore allowed; the tax office treats an excessive one as a hidden profit distribution (§ 8 Abs. 3 KStG).

Once the UG increases its share capital to at least €25,000, the special rules on capital, payment, reserve and shareholders' meeting no longer apply (§ 5a Abs. 5 GmbHG). Legally it is then a GmbH. It may keep the name “UG (haftungsbeschränkt)” or change it to “GmbH” by amending its articles.

• From company funds: The reserve and other revenue reserves are converted into share capital (§§ 57c ff. GmbHG). The basis is an approved balance sheet dated no more than eight months before the filing. No new money comes in.
• Against contributions: The shareholders pay in the difference. Because the UG reaches the GmbH threshold with this increase, contributions in kind are allowed for it (BGH, II ZB 25/10).

Either way the notary records the resolution (§ 53 Abs. 2 GmbHG), certifies the subscriptions for new contributions (§ 55 Abs. 1 GmbHG) and files the increase with the commercial register. This is not a conversion under the Transformation Act: tax number, register number, accounts and contracts stay. If you have the capital from the start, skip the detour and form a GmbH right away.

Only the UG's assets are liable to creditors (§ 13 Abs. 2 GmbHG), just as for a GmbH. But because the cushion is thin, managing directors reach the duties that apply in a crisis sooner:

• Before registration: Whoever signs contracts in the UG's name after the notary appointment but before the entry is personally liable (§ 11 Abs. 2 GmbHG).
• Shareholders' meeting when insolvency looms: In a GmbH the managing director must call the shareholders as soon as half the share capital is lost (§ 49 Abs. 3 GmbHG). With a UG of a few hundred euros that would happen all the time, so instead: call them as soon as illiquidity is imminent (§ 5a Abs. 4 GmbHG), that is, when it is foreseeable that the UG cannot pay its bills in the coming months (§ 18 InsO).
• Filing for insolvency: If the UG is illiquid, the managing director has at most three weeks, if over-indebted six weeks (§ 15a Abs. 1 InsO). It is over-indebted when its assets do not cover its debts and continuing for the next twelve months is not predominantly likely (§ 19 Abs. 2 InsO). Payments made after insolvency has set in must be reimbursed to the UG (§ 15b InsO).
• Due care, taxes, social security: As in every GmbH, the managing director is liable for breaches of duty (§ 43 GmbHG), unpaid taxes and employees' social security contributions.
• Missing suffix: Acting without “UG (haftungsbeschränkt)” risks liability for creating a false impression, see name suffix.

After the entry, the UG has the same obligations as a GmbH:

• Tax office: The tax registration questionnaire within one month via ELSTER (§ 138 Abs. 1b, 4 AO); our filling guide (in German) walks through it, the tax office directory shows the responsible office.
• Trade office and IHK: Trade registration (§ 14 GewO), then compulsory membership of the IHK or the chamber of crafts.
• Transparency register: Report the beneficial owners (§ 20 GwG), €19.80 a year.
• Annual accounts: A balance sheet showing the statutory reserve, prepared within six months (§ 264 Abs. 1 HGB) and published within twelve months (§ 325 HGB). More under annual accounts for corporations and bookkeeping.
• Taxes: 15% corporate income tax plus solidarity surcharge (§ 23 KStG) and trade tax at a 3.5% base rate times the municipal multiplier (§ 11 Abs. 2 GewStG), with no allowance.

The UG's registered seat decides the registry court, the IHK, the trade office and the trade tax multiplier. For these cities we have collected the offices:

• Forming a UG in Berlin: Amtsgericht Charlottenburg
• Forming a UG in Düsseldorf: Amtsgericht Düsseldorf
• Forming a UG in Frankfurt am Main: Amtsgericht Frankfurt am Main
• Forming a UG in Hamburg: Amtsgericht Hamburg
• Forming a UG in Cologne: Amtsgericht Köln
• Forming a UG in Munich: Amtsgericht München

For other places, find the court and tax office in our commercial register directory and tax office directory.

As of 9 October 2026. Our formation cost calculator (in German) computes the fees under the GNotKG, the commercial register fee ordinance and the GmbHG, with every item and assumption. This guide is no substitute for legal or tax advice; for your case, get advice from a lawyer or a tax advisor.

Statutes

• § 2 GmbHG
• § 4 GmbHG
• § 5 GmbHG
• § 5a GmbHG
• § 7 GmbHG
• § 8 GmbHG
• § 11 GmbHG
• § 13 GmbHG
• § 19 GmbHG
• § 35a GmbHG
• § 43 GmbHG
• § 49 GmbHG
• § 53 GmbHG
• § 55 GmbHG
• § 57c GmbHG
• § 15a InsO
• § 15b InsO
• § 18 InsO
• § 19 InsO
• § 138 AO
• § 14 GewO
• § 20 GwG
• § 8 KStG
• § 23 KStG
• § 11 GewStG
• § 264 HGB
• § 325 HGB