1. Notarized articles of association
- In the first step, the GmbH is formed by notarized articles of association ( 2 I, Ia GmbHG)
- Shareholders can be: natural persons (including spouses, foreign nationals), legal entities (such as AG, GmbH, e.V.), commercial partnerships (OHG, KG, Partnerschaftsgesellschaft) or joint ownership communities (such as GbR, community of heirs).
- Even before the notarized articles of association are concluded, binding agreements may exist between the future shareholders of the GmbH. As a rule, such a pre-formation company is an OHG (operation of a commercial business) or a GbR (operation of another type of business).
Content of the articles of association
- Company name (§ 4 GmbHG) and registered office (§ 4a GmbHG) of the company
- The name of the company is {…}
- The registered office of the company is {…}
- The company name can be formed either as a descriptive name derived from the object of the company, or as a personal name containing the name of at least one shareholder, or as a mixed name combining personal and descriptive elements, or using a fantasy name . The legal form suffix, which may also be abbreviated as “GmbH”, is mandatory (§ 4 GmbHG) and must appear on business letters (§ 35a GmbHG).
- The object of the company
- The company's object is {…}
- It can be any lawful purpose (§1 GmbHG). The object of the company must specify the business area, i.e., describe the activity in concrete terms.
- Duration of the company
- The company comes into existence upon registration in the commercial register. The company is established {for an indefinite period}.
- Who should become Shareholders ?
- Amount of the share capital
- The company’s share capital amounts to EUR {at least 25,000.00}.
- It must amount to at least 25,000 euros in cash or contributions in kind and be divisible by fifty in euros (§ 5 GmbHG).
- Capital contribution
- The following subscribe to the share capital as their capital contributions:
- {Name of Shareholder 1} a capital contribution with a nominal amount of EUR {amount}
- {Name of Shareholder 2} a capital contribution with a nominal amount of EUR {amount}
- Furthermore, the number and nominal amounts of the shares that each shareholder takes over against a contribution to the share capital (capital contribution) must be stated (§3 I No. 4, §5 GmbHG), i.e., the contribution to the share capital to be made by each shareholder must be specified (§5 GmbHG). The nominal amount of each share must be in full euros, and the sum of the nominal amounts of all shares must equal the share capital (§5 III GmbHG). The amount of the capital contribution determines the amount of the share.
- Managing Director
- The company has one or more managing directors.
The appointment and dismissal of managing directors, as well as their release from the managing directors’ non-compete obligation, are effected by shareholders’ resolution.
- Representation of the company
- A sole managing director represents the company alone. If several managing directors are appointed, the company is represented by two managing directors jointly or by one managing director together with an authorized signatory (Prokurist). By shareholders’ resolution, the managing directors’ power of representation can be regulated differently; in particular, all or individual managing directors can be released from the restrictions of § 181 BGB.
- The managing directors’ power to represent the company vis-à-vis third parties is not restricted by the limitations on management provided for by law or the articles of association.
- Beyond this minimum content, the notarized articles of association can also contain further voluntary provisions Most often, they contain provisions on management, rules of representation, supervisory bodies, the shareholders’ meeting, restrictions on the transfer of shares and special rights or obligations of individual shareholders, such as a veto right against majority resolutions.
2. Appointment of the corporate bodies
- For the pre-incorporation company (Vor-GmbH) to be able to act and for the application for registration, it is a prerequisite for registration that the shareholders, in the articles of association or by a simple majority resolution at a shareholders’ meeting, appoint at least one managing director.
- Shareholders or other persons (third-party management) can be appointed as such (§6 III GmbHG). They must have full legal capacity and must neither have a criminal record for insolvency offenses nor be subject to an industry-specific occupational ban (§ 6 II No. 1 to 3 GmbHG). Foreign nationals may also be managing directors.
3. Raising the share capital
- The application for registration in the commercial register may only be filed once the shareholders have actually made the promised share capital available to the company (§ 7 GmbHG). A business account is opened at a bank. A distinction must be made between formation with cash contributions and formation with contributions in kind.
- In a cash formation , half of the minimum share capital under §5 I GmbHG, i.e. 12500 euros, must be paid into the business account, whereby at least one quarter of the nominal amount must be paid on each share (§ 7 II GmbHG).
- The articles of association may also provide for full payment or contain a provision transferring the call for the remaining amount to the management. At the time of the application for registration, the money must be at the free disposal of the managing directors (§8 II GmbHG), i.e., it must have been actually and legally transferred to the company’s assets with final effect (proof of payment).
- The articles of association may stipulate that the share capital is raised wholly or partly (mixed contribution) through contributions in kind.
- The contributions in kind must be placed at the free disposal of the managing directors, i.e., they must be made in full (7 III GmbHG). In total, at least 12500 euros of the share capital must have been paid in or provided through contributions in kind .
- Where contributions in kind are made, a formation report on contributions in kind (Sachgründungsbericht) must be prepared setting out the adequacy of the assets to be contributed. Overvaluation is not permitted (§9, 9c GmbHG)
4. Registration of the company in the Commercial Register by the notary
- The managing directors must file the GmbH for registration with the Register court of the Local Court at the company’s registered office (§ 8 GmbHG).
- Among other things, they must affirm, that the contributions on the shares are at their free and final disposal, either in full or at least in the amount required by law, and they must submit their specimen signature for filing.
- The documents to be submitted include the articles of association, the minutes of the appointment of the managing directors, a list of shareholders, a certificate of no objection from the IHK (Chamber of Industry and Commerce), which reviews the company name and the permissibility of the company’s purpose, and, for formations with contributions in kind, additional documents.
5. Registration in the commercial register
- The application for registration and the documents submitted, in particular the value of the contributions in kind, are reviewed by the registration court, and if the company has been properly formed, the GmbH is entered in Division B of the commercial register (HRB).
- This completes the formation process, and the GmbH has constitutively come into existence as a legal entity with limited liability (§ 11 I GmbHG).
- In addition to the registration in the commercial register, the GmbH is also required to register in the Transparency Register. The notification is made electronically via the Transparency Register website.
