UG company in Germany

GmbH purchase agreement in Germany
GmbH purchase agreement in Germany
April 29, 2024
UG company in Germany

UG company in Germany

Entrepreneurial Limited Liability Company, or UG, is a popular legal form in Germany. Near ten percent of the companies that entered the commercial register in Germany have the UG legal form. Here at Wise Business Group, we will give you essential information about the required capital, advantages, and liability of the UG Company in Germany.

Entrepreneurial Limited Liability Company (UG) in Germany

An entrepreneurial limited liability company or mini-GmbH, also known in Germany as UG, Unternehmergesellschaft, or Haftungsbeschränkt, is not an independent legal form, but rather a GmbH with the difference that the amount of initial capital required for the final registration of the company is less than 25,000 euros. It means it is possible to establish limited liability companies with a minimum capital of 1 euro in Germany.

The company is always obliged to keep a quarter of its annual net profit until it reaches the amount of 25,000 euros, which is the minimum capital for GmbH formation, to compensate for the initial capital in this legal form. The collected cash capital, 25,000 euros, can later be converted into partners’ shares, in which case the mini-GmbH is officially converted into the full GmbH.

Read more at Wise Business Group: Which one is better? A GmbH or UG in Germany?

Key advantages of a UG in Germany

  • UG is a limited liability legal form, so its key advantage is that the shareholders are not liable with their private assets.
  • Its establishment is relatively easy and fast. Usually, setting up duration for a UG takes around 4 to 8 weeks.
  • A later conversion of the UG into a GmbH is possible.

Read more: All you need to know about the limited liability company (GmbH) in Germany!

Rules and obligations

Mini-GmbH and GmbH companies have a standardized guideline under the German Limited Liability Company Act called the Model Article. You must register and sign this article (statute) in the notary office. Except for the minor cases mentioned in the article of each legal form, mini-GmbH companies are subject to the same responsibilities and rules as standard GmbH companies.

Contact us for more information on how to set up a GmbH or mini-GmbH in Germany.

Information on UG or mini-GmbH companies at a glance

  • The entrepreneurial company (UG) has existed since 2008.
  • It is a particular form of limited liability company (GmbH), not an independent legal form.
  • It is also colloquially called a mini-GmbH.
  • The required capital for establishing a UG in Germany is 1 euro.
  • Shareholders must keep one-quarter of the company’s annual net profit to compensate the initial capital.
  • By providing 25000 euros, you can convert it to a GmbH.

Company formation in Germany

You can contact us to receive advice on establishing a company in Germany. We can help you with the appropriate legal form selection, business registration, commercial register entry, and accounting and tax affairs in Germany. If you have any questions, do not hesitate to contact us.

WhatsApp Contact Button

If you fill out the form below and send it to us, our advisors can arrange a consultation.

Company Formation

  • Please insert the full tel number with your country code!
  • It is also recommended to mention the name of the city or cities where you would consider to establish your business!
  • This field is for validation purposes and should be left unchanged.
whatsapp chat