Companies in Germany

When shifting to Germany for work, it’s beneficial to also have a general idea of the kinds of businesses you’ll meet. That’s why we figured we’d give you a quick rundown. When we talk about business forms, we’re talking about the regulatory structure. Individual entities or businesses (Einzelunternehmen), private companies or associations (Personengesellschaften), and (stock) firms (Kapitalgesellschaften) are the terminology used in Germany. Let’s start with the small firms.

Individual enterprise

Individual enterprise is only just one type, which is interestingly named: individual enterprise. Freelancers and single entrepreneurs, such as artists or craftsmen, are most involved in this form of company. The benefit of this legal system is that you have total power over your business. You are, however, completely and personally responsible for it.

Individual Companies

GbR

The Gesellschaft bürgerlichen Rechts is the legal equivalent to a simple corporate partnership, consisting of at least two business partners. When beginning and operating a GbR, the bureaucratic complexities are minimal, and you don’t need any initial resources. The drawback of the moral freedom being that each associate is also entirely accountable. The GbR is very common among entrepreneurs and start-ups.

PartG

For example, the Partnergesellschaft is not used as much as the GbR. For freelancers from different industries, it is particularly interesting to partnership. Part G is bureaucratically more complex, but it still provides benefits. The corporation may be licensed and the capital of the company is accountable to all personal responsibility.

OHG

The Offene Handelsgesellschaft has great respect among credit institutions and corporate partners. The explanation for this is that OHG participants are individually accountable for their actions. Contrary to the GbR, the OHG is entered in the commercial register.

KG

The general partner, who manages the firm, and the limited partners make up the Kommanditgesellschaft. The latter owns stock in the business but is only responsible to the extent of their ownership. The general partner is the only one that is absolutely accountable.

Corporations

GmbH

The “Gesellschaft mit beschränkter Haftung, short GmbH, is perhaps Germany’s most well-known business type. The equivalent would be the limited partnership, either in British or American. You need money in order to found a GmbH, and face some regulatory obstacles, but you are subsequently not directly responsible for the capital extent of the enterprise.

GmbH & Co. KG

The Gesellschaft mit beschränkter Haftung & Companie Kommanditgesellschaft, like the KG, is a business for entrepreneurs who need additional resources. The limited shareholders supply the company’s responsible entity, the GmbH, with the necessary capital (25.000 €).

UG

A variant of the GmbH is the Unternehmergesellschaft. This regulatory system is perfect for small enterprises. You just need a small amount of money to get moving (1 €). The organization is responsible to the extent of its resources, but private shares are frequently required to back up credit applications.

AG

The German stock corporation is known as an Aktiengesellschaft. Apart from large corporations, medium-sized businesses may find the AG to be a feasible alternative. In this situation, the corporation is not a member of a stock exchange, and the owners are normally the company’s staff or customers. There must be an executive board as well as a supervisory board, and an AG must have a minimum capital of 50,000 euros to begin.

eG

The eingetragene Genossenschaft (registered cooperative) is a legal entity that acts as a platform for small and medium-sized businesses to collaborate. It has a lot in common with a registered organization.