In this article, we explain a bit how to arrange an article of association (AoA) for companies such as GmbH, UG, and GBR.
Any international businessman who wants to set foot in Germany should represent his/her business as a legal entity. After the business concept (business plan) has been approved by authorities, or even before that, the company can start its operation. In other words, registering business in Germany is quite independent from your act of getting approval to reside and work in Germany. However, if you would like to proceed also as a managing director, it is highly recommended to get your concept approved first.
When you proceed to register your business in Germany, depending on your legal entity, several authorities will be engaged. As a limited company, you will deal with the following organizations to register your business:
Arranging an AoA for companies such as GmbH and UG and notarizing it in Germany is necessary. Part of the content of the GmbH contract is already determined by law and clear for everyone and should be noted in the AoA. Furthermore the shareholders are also entitled to add some sections to the AoA if to be found necessary.
For GbR which is a partnership company, arranging an AoA and notarizing it is not mandatory, but since there are several partners involved, it is highly recommended for your safety in your business partnership.
For arranging a GmbH or GbR contract, consulting with a lawyer, business consultant, or a tax consultant is a wise decision. Especially for immigrants, since the business activity listed in AoA should be in accordance with their business plan, it is recommended that one service provider delivers them all together.
An article of association will regulate the rights and liabilities among partners/ shareholders. Especially in the time of dispute, a well established AoA can resolve many problems and avoid misunderstandings. Thus the legislator in Germany has made notarizing the AoA for particular legal entities obligatory.
For forming other types of legal entities such as GbR, arranging an AoA is not necessary and the agreement will be usually made verbally which can be partly mentioned also in the work license (Gewerbe) of the business in Germany. However, even for these types of companies a written notarized AoA is highly suggested to observe the rights of all shareholders and prevent disputes in future.
In addition to the aforementioned sections, one AoA can be optionally chosen to be more comprehensive and include the following sections too:
As already mentioned, arranging an article of association for a GbR company is not mandatory but recommended. If you would like to arrange one, here is the list of main parts to be covered:
As the company grows and ages, the changes in operations will be inevitable that will make the adjustment for the AoA very necessary. These changes should also be notarized as follows: