Company Forms

Company Forms

Quick Facts: Corporations

When choosing the legal form of the company, a corporation is usually the best option for larger, established companies. There are four major forms of corporations under German law:

Main Characteristics

A corporation is a legal entity, meaning that the holder of rights and obligations is not the individual shareholder, but the company itself. The corporation itself concludes contracts, holds assets and is liable for taxation.

Liability is limited to the corporation's business assets, including share capital.  A minimum share capital is required, and the accounting obligations are more extensive than those for other business legal forms (such as partnerships).

Establishment of a Corporation

A corporation can be established by any number of different partners. Compensating the limited personal liability of the shareholder(s), corporations require a minimum share capital. It can be contributed in cash or in kind (e.g. real estate or patents). The establishment must be specified in the articles of association and certified by a notary. Additional establishment steps are necessary for certain forms of corporations.

The establishment procedure ends with registration in the commercial register (Handelsregister). Only at this point in time does the corporation's limitation of liability become effective. The application for the registration of the company in the commercial register has to be signed by the managing director(s) personally before a notary, who certifies and files it with the responsible commercial register in electronic form. Prior to the corporation starting business, the trade office (Gewerbe-/Ordnungsamt) must be notified of the business activity in question.

Please read more about business registration procedures here:

Taxation of Corporations

Corporations are liable to corporate income tax, trade tax and solidarity surcharge. The average tax burden is less than 30 percent. In some regions, due to a locally variable rate of trade tax, it is under 23 percent.

For further information on the taxation of corporations please read here:

Forms of Corporations: Overview

Legal/Establishment FormMinimum Number of PartnersMinimum Share CapitalLegal LiabilityEstablishing Formalities
Limited Liability Company (GmbH)One partnerEUR 25,000Liability limited to share capitalModerate
Limited Liability Entrepreneurial Company ("Mini GmbH")One partnerEUR 1.00Liability limited to share capitalLow-moderate
Stock Corporation (AG)One partnerEUR 50,000Liability limited to share capitalModerate-high
Partnership Limited by Share (KGaA)Two partners: general partner and limited shareholderEUR 50,000General partner: personal unlimited liability Limited shareholder: limited share liabilityModerate-high


Christina Schön Christina Schön | © GTAI/ Illing & Vossbeck Fotografie

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Christina Schön

Udo Sellhast Udo Sellhast | © GTAI

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Udo Sellhast