GmbH

Structure and capital requirements

A GmbH must have at least one shareholder (Gesellschafter) and one managing director (Geschäftsführer). The managing director can be a shareholder or a third party. The €25,000 minimum capital is split into nominal shares (Geschäftsanteile), with each shareholder holding one or more shares of any denomination (no minimum-share-amount rule since the 2008 MoMiG reform).

• Geschäftsführer: managing director(s), responsible for operations and external representation
• Gesellschafterversammlung: shareholders' meeting, takes major decisions (capital changes, profit distribution, articles amendments)
• Aufsichtsrat: supervisory board, optional for small GmbHs; required if employees exceed 500 (co-determination)

UG (haftungsbeschränkt) as the low-capital cousin

Since 2008, Germany has a low-capital variant called Unternehmergesellschaft (haftungsbeschränkt) or UG. It can be formed with as little as €1 in capital but must retain 25% of annual profits as reserves until it reaches the €25,000 GmbH threshold, at which point it can convert. UGs are common for German startups in the bootstrap stage.

Records and registration

GmbH formation requires notarial deed (notarielle Beurkundung) and registration in the Handelsregister (commercial register) at the competent Local Court. Shareholders are listed in the Gesellschafterliste (shareholders list), which is updated and filed with each share transfer. The Gesellschafterliste functions like a share register; transfers require notarial form and are only effective against the company once the updated list is filed.