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Starting a business

Forming a UG: step by step

The Unternehmergesellschaft (entrepreneurial company) combines limited liability with a low capital requirement. The formation process mirrors that of the GmbH — with a few particularities worth knowing.

Updated August 2026 · 8 minutes read

Notary stamp and incorporation documents with an envelope

Step 1: business idea, shareholders, company name

First clarify who holds which share and who becomes managing director. The company name must carry the suffix "UG (haftungsbeschränkt)" or "Unternehmergesellschaft (haftungsbeschränkt)" — the abbreviation is compulsory and must not be omitted. The IHK checks the name on request free of charge.

Step 2: articles of association or standard template

For up to three shareholders and one managing director, the standard template (Musterprotokoll) is sufficient — it is cheaper but inflexible. As soon as you need provisions on succession, non-compete clauses, profit distribution deviating from shareholdings, or changes of shareholder, individual articles of association make sense.

Step 3: notary appointment

The notary notarises the articles of association, appoints the managing director and certifies the commercial register application. All shareholders must be present or validly represented. Bring valid identification documents; for participants from abroad, certified translations are required.

Step 4: business account and payment

The UG may only be formed by way of a cash formation — non-cash contributions are excluded. The entire share capital must be paid in full before registration. A bank statement serves as evidence for the register court.

Step 5: commercial register

The notary submits the application electronically. Until registration is complete, you trade as "UG (haftungsbeschränkt) i. G." — during this phase, those acting on the company's behalf are personally liable. Keep the volume of business small before registration for this reason.

Step 6: trade office, tax office, further notifications

  1. Trade registration with the municipality at the company's registered seat.
  2. Tax registration questionnaire via ELSTER (the tax authorities' online portal) — this results in a tax number and, where applicable, a VAT ID.
  3. Membership of the IHK or HWK (chamber of trade) arises automatically.
  4. Registration with the relevant trade association (Berufsgenossenschaft) within one week.
  5. Company number (Betriebsnummer) from the Federal Employment Agency as soon as staff are employed.
  6. Check whether an entry in the transparency register is required.

Typical pitfalls

  • Too little share capital leads to immediate balance-sheet over-indebtedness.
  • The legal form suffix is missing from invoices, the website or the legal notice (Impressum) — this can give rise to personal liability.
  • The statutory 25 percent reserve is forgotten in the annual financial statements.
  • Contracts are concluded in the company's name before registration.

Mandatory details in business correspondence

All business correspondence — on paper and by email — must show the company name with legal form suffix, registered seat, register court, commercial register number and all managing directors. Anyone sending formal letters should build these details permanently into the letter template.

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