Requirements
A GmbH can be formed by one or more persons, whether natural or legal. The minimum share capital is €25,000, of which at least half must be paid in before registration in the case of a cash formation. Every share must be denominated in whole euros.
The articles of association
Mandatory content includes the company name, registered seat, object of the business, amount of share capital and the shareholders' shares. Sensible additions include provisions on management authority, matters requiring shareholder consent, shareholder resolutions, withdrawal of shares, compensation and non-compete clauses. The object of the business should be specific enough for the register court and broad enough for future developments.
Cash formation or non-cash formation
| Cash formation | Non-cash formation | |
|---|---|---|
| Contribution | Money | Machinery, vehicles, rights, businesses |
| Evidence | Bank statement | Non-cash formation report with evidence of value |
| Effort | low | high, the register court examines whether the value is justified |
| Risk | low | liability for the shortfall if overvalued |
Process in seven steps
- Agree the company name with the IHK and check trade mark and domain availability.
- Have the articles of association drafted and agree them internally.
- Notary appointment: notarisation of the articles, appointment of management, list of shareholders.
- Open a business account and pay in the share capital.
- Application to the commercial register through the notary; wait for the entry.
- Trade registration and the tax registration questionnaire.
- Trade association (Berufsgenossenschaft), transparency register, company number where applicable, and immediate notifications.
The pre-incorporation GmbH (Vor-GmbH)
Between notarisation and registration, the pre-incorporation GmbH (Vor-GmbH) exists. It already has legal capacity, but anyone acting in its name is personally liable until registration takes place. This liability of those acting (Handelndenhaftung) ends automatically upon registration — liabilities then pass to the GmbH.
Managing directors' duties from day one
- Proper bookkeeping and timely annual financial statements.
- Payment of payroll tax and social security contributions — personal liability is a risk here.
- Filing for insolvency no later than three weeks after becoming unable to pay debts.
- Compliance with the mandatory details on business correspondence.
After formation: correspondence begins
The register court, tax office, IHK and trade association (Berufsgenossenschaft) get in touch by post, and many replies must be signed and sent back. If you don't run an office with a printer, you can draft letters online and have them sent directly — saving several trips with every formation.
The most common mistakes when forming a GmbH
| Mistake | Risk | Better |
|---|---|---|
| Paying capital into a private account before the notary appointment | Payment may not count as contribution | Notarise first, then pay into the pre-GmbH's account |
| Letting the contribution flow straight back to shareholders | Contribution counts as unpaid, liability remains | Repayments only after advice and with disclosure |
| Contracts before registration without “i. G.” | Personal liability of those acting | Trade as “GmbH i. G.” and limit risks |
| No managing director contract | Unclear pay, tax problems for shareholder-directors | Sign a written contract before starting work |
Checklist for the first 30 days
- Register the trade and submit the tax registration questionnaire via ELSTER.
- Check beneficial owners and keep the transparency register in mind.
- With employees: apply for an establishment number and register with the liability insurer.
- Add the mandatory details to letterhead, invoices and website.
Mandatory details are explained in the commercial register entry guide, costs in cost of forming a GmbH. Write your first business letters in the letter editor.