Types of German Companies

Entrepreneurs of any nationality have the possibility to chose from various forms of business entities in Germany, even though the most common company types are the German limited liability company, or Gesellschaft mit beschränkter Haftung and the joint stock company, or Aktiengesellschaft.

Formation of a German Limited Liability Company (Gesellschaft mit beschränkter Haftung - GmbH)
The German limited liability company may be formed by one or more persons, individuals or legal entities that must provide a minimum capital of EUR 25.000 in monetary, or non monetary contributions. Each member must submit a minimum amount of EUR 100, and receive a share with a nominal value. The shares of a German limited liability company are not negotiable and may not be quoted on stock exchanges, but may be transferred with certain notarized documents. The shareholders' liability is determined only by the amount of contribution made to the company's capital. A limited liability company must be entered for registration at the Commercial Register.

Formation of a German Joint Stock Company (Aktiengesellschaft - AG)
In Germany the joint stock company is regulated and governed by a very strict law, the Joint Stock Corporation Act, or Aktiengesetz. The shares of such a company may be quoted on stock exchanges, and the minimum capital for such a company is EUR 50.000 divided into shares. The joint stock company may be formed by at least one person, and its liability is only for the amount of capital

Formation of a German General Partnership (Offene Handelsgesellschaft - OHG)
The German general partnership is a typical general partnership founded by at least two members who are known as general partners and hold full liability to the company's obligations. Each general partner has the right to claim profit and to interfere in the company's management.

Formation of a German Limited Partnership (Kommanditgesellschaft - KG)
The limited partnership is regulated by the Commercial Code and can be founded by at least two persons, natural, or companies who are divided into two types of partners: general and limited. The general partner, Komplementär, has an unlimited liability that extends to his or her personal assets and the limited partner, Kommanditist, is liable to the company's obligations to his nominal holdings in the firm.

Formation of a German Sole proprietor
This business entity is owned and run by one person who is held liable for his or her company's obligations, but also benefits of the profit. The firm must be registered at the Trade Office if the entrepreneur engages in trading activities, or hires employees.