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According to Statista, there was Years 2018 in Germany alone through 720.000 corporations, which includes the GmbH. The "limited liability company" connects banks, companies and individuals with security and liquidity. In today's article, we address the question of how to set up a GmbH and what conditions, advantages and disadvantages brings such a foundation with it.

What is a GmbH and what are the prerequisites for the foundation?

As already mentioned, the limited liability company is a "limited liability company", which exists in three different forms:

  • UG (haftungsbeschränkt) - entrepreneurial company
  • gGmbH - a non-profit limited company
  • One-person-GmbH / one-man-GmbH

To found a GmbH, at least one natural person and a share capital of 25.000 Euro is required. At the same time, a GmbH can accommodate any number of shareholders (natural and legal persons).

The advantages & disadvantages of a GmbH

The GmbH is extremely popular not only because of the high reputation, but also because of the limited liability. As a shareholder, you are liable only with the business assets - your private assets will remain intact in any case.


  • Liability exclusively with the business assets
  • Very good reputation with companies and banks
  • Suitable for individuals as well as cooperations
  • Covers many industries and businesses
  • Tax benefits from numerous business expenses (eg wages)
  • Partnership agreement for more transparency and security of the individual parties


  • High share capital of 25.000 Euro necessary (at least half when founded)
  • Elaborate accounting and strict controls
Step by step to success

Step by step to success

GmbH are founded in 5 steps

It is comparatively expensive to found a GmbH. For this reason, we have summarized in five easy steps, which places you should look for and what you should pay attention to.

  1. First of all, it is important to set up a social contract with all participants and to regulate the business idea as well as further formalities. Legal aid can not do any harm here - especially in view of the high turnover that can be expected from a limited liability company.
  2. The second step is the notarization of the articles of association. In this case, all parties involved must be present and be informed by the notary once again about their rights and obligations.
  3. This is followed by the opening of a business account and the deposit of at least 12.500 Euro, ie half of the share capital.

Attention: It is important to have the disposition of the share capital certified by the bank, as the notary must present this document to the competent court.

  1. After depositing the share capital, an entry must be made in the commercial register and the notary re-visited. He contacts the court, certifies the deposit of the capital and takes care of the further formalities.
  2. Finally, contact the tax office and fill out the questionnaire for tax collection. Most likely, additional documents such as the articles of association or extract from the commercial register will be requested.

At the same time, you must visit the Trade Licensing Office and register your trade there, quoting the following information:

  • Company name
  • legal form
  • Business location
  • Activity of the company
  • Handelsregistereintrag
  • Legal representatives of the company and their contact details

After completing the above steps, it is important to register with government agencies such as the IHK / HWK, all insurance carriers and the Federal Employment Agency.


Conclusion: The establishment of a limited liability company is comparatively time-consuming and costly, but brings with it numerous advantages.


Do you have questions or suggestions about starting a business? Feel free to contact us!

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