Buying a GmbH

Does it make sense to buy a GmbH?

Should you buy a GmbH if you want to set up a company quickly?

Should I buy a limited company if I want to set up a new company?

What is the significance of the GmbH?

The limited liability company (Gesellschaft mit beschränkter Haftung, GmbH or Gesellschaft mbH for short) is a legal entity under private law and is a form of corporation. In Germany, the GmbH is by far the most common legal form for corporations. Every year, around 50,000 companies are founded in the form of a GmbH, and there are currently more than 1 million GmbHs.

What is a GmbH?

As a legal entity, the GmbH is legally independent, it can acquire assets, have debts, sue or be sued in court. The GmbH must have a minimum share capital of 25,000 Euros, at least half of which, i.e. 12,500 Euros, must be paid in when the company is founded. The founding shareholders are liable for the rest.

The managing director is of particular importance as he represents the GmbH externally. He is responsible for the operational business and for ensuring that the company fulfills its legal obligations. This includes monitoring that the GmbH remains solvent and is not overindebted. If he violates his duties, he can be held personally liable.

What are the advantages of the GmbH?

The legal form of the GmbH enjoys a high reputation in the business world. It simply appears more reputable than a sole proprietorship, as at least the share capital has to be raised.

The liability of a GmbH is limited to the company’s assets. The shareholders of the GmbH are only liable for their capital contribution. If the GmbH fails, the entrepreneur only loses his capital contribution. In this way, the entrepreneurial risk can be limited from the outset and there is no liability with the entire private assets.

How does the formation of a GmbH work?

After all the preparations, a notary appointment is first required for the notarization of the articles of association and the appointment of the managing director. The name, i.e. the company name, and the business purpose must be determined. Only then can a bank account be opened into which the capital contribution is to be paid. The corresponding notarial deeds are required for the opening. A traditional bank (branch bank) requires an appointment on site. An online bank is advantageous. The account statement showing the paid-in share capital is sent to the notary. The notary then submits the application to the commercial register.

The founder receives a cost note from the commercial register for the registration fee to be paid. Some local courts take around two weeks to process this fee. If the judge does not find any formal errors during the subsequent examination, the entry in the commercial register is made after a further one to two weeks. If you found the company yourself, six to eight weeks have already passed by this time.

Buying a GmbH: buying a GmbH as an alternative to a new company

However, founding a new company is not always attractive; many entrepreneurs prefer to take over an existing GmbH, i.e. to buy it. Buying or taking over an existing GmbH can have a whole range of advantages over founding a new company. Founders are often in a hurry. After all, they want to concentrate on the business and not on bureaucratic compulsory exercises.

The entrepreneur has the option of taking over a shelf company (Vorrats-GmbH), i.e. buying it. This method is much faster but is often not widely known in the business world. In the case of a so-called shelf company, the formation is carried out completely in advance by a service provider and the finished shelf GmbH (or UG) is sold to the customer. It is already entered in the commercial register as an “empty” company. Apart from the capital contribution, it has no assets and does not and did not carry out any business activities. The company is therefore founded “on stock” and therefore has this name.

Service providers for shelf companies

Service providers who specialize in the formation and sale of shelf companies always have several GmbHs, UGs and sometimes also stock corporations in their portfolio. When the shares are transferred (purchased), the previous managing director is removed and a new managing director appointed by the customer. The name (company name) of the company and the business purpose are customized.

The domestic business address, at which the company must be reachable by post, is usually also changed. Some service providers offer to leave the company at the previous address and even provide office space. A monthly rent is then due for this. The advantage: the new company is ready to go within a very short time so that business can start immediately. The entrepreneur immediately enjoys all the advantages of a GmbH, such as limited liability or a good reputation with customers.

Overview of the formation of a GmbH compared to the purchase of a shelf GmbH

The acquisition of a shelf company (Vorrats-GmbH) is therefore a much quicker and easier way to set up a GmbH.

Shelf companies: What is the difference to a shell company (Mantel-GmbH)?

A shell company is when the GmbH was already doing business and has now ceased its business operations, i.e. only the “empty” shell remains. The buyer therefore bears the risk of assuming any existing liabilities of the shell company with the takeover. This is the main advantage of the shelf company over the shell company.

When does the purchase of a shelf company (Vorrats GmbH) make sense?

The purchase of a shelf company makes sense in the following business situations:

• For start-ups that want to get off the ground quickly, e.g. are about to complete an order.
• Companies that need a subsidiary quickly in order to spin off a business division.
• Companies or freelancers who want to enter a new, possibly risky business area at short notice without affecting their main business in the event of failure.
• Companies that want to operate under another brand without a recognizable connection to the immediate main brand. For example, to place a similar product in a different price segment.
• Foreign companies that are seeking to enter the German market and want to avoid the expense of setting up a new company.

What needs to be considered when purchasing a shelf company?

As the buyer of a shelf company, you should note the following points to ensure that the takeover runs smoothly and legally compliant:

• Share capital paid in: The entire share capital must actually be paid in (verifiable by means of a bank statement). The notarial deed should contain the seller’s guaranteed assurance that the entire share capital (at least EUR 25,000 in the case of a GmbH) will be transferred to the company’s account.
• Bank account: Of course, the company should have a bank account. As the bank account belongs to the company, it does not have to be transferred separately. Only the new managing director must legitimize himself to the bank (according to the KYC rules = “Know Your Customer” of the Money Laundering Act).
• Age of the company:A genuine shelf company should not be very old. Reputable service providers have a high throughput of start-ups and sales, so the company should not be more than a few months old. The data can be checked in advance in the commercial register.
• Not a shell company: Buyers should ensure that the company is not a shell company that has already been in business. This is strongly discouraged, as otherwise all the liabilities and risks of this company will be assumed. A corresponding assurance must be included in the notary contract.
• Notary appointment: A notary appointment should already be offered by the service provider: If this has to be arranged yourself first, unnecessary time is lost. Very good service providers also look after the customer at the appointment itself.
• Advice on name and business purpose: Ideally, the service provider will also help you choose a new name and business purpose so that there is no need to contact the Chamber of Industry and Commerce.
• Reputable provider: Shelf companies should never be purchased from dubious sources. Classified ad portals are not the right address. Even if the surcharge is very low, caution is advised. Offers such as “GmbH or UG without share capital” should be avoided at all costs. This is not legally permissible. A corporation must have the stated share capital at least on the day of entry in the commercial register and the founder must be able to prove this in an emergency.

These are the advantages and disadvantages of buying a shelf company:

These costs are to be expected when purchasing a shelf company

The services relating to the shelf company are not free of charge. Buyers of a GmbH can expect a surcharge of around EUR 3,000 for a purchase price of around EUR 28,000 including share capital. The UG is cheaper and usually costs EUR 2,000 more, while the AG costs EUR 5,000 more on top of the paid-up share capital. This surcharge includes all formation costs (notary, commercial register, administration, bank account). The costs for the transfer of the shares (notary, commercial register) are borne by the buyer. For legal reasons, a Vorrats-GmbH is always offered and sold with fully paid-up share capital.

Can I reserve a GmbH in advance if I want to buy it?

With many service providers who sell GmbHs, the future buyer can reserve the shelf company in advance.

What makes the purchase of shelf companies so interesting?

Buying a shelf company is therefore the modern way to set up a company. Reserve your shelf company today. We offer numerous GmbHs, including with a registered office in Berlin.

Buying a GmbH – it couldn’t be quicker or easier. Found a company today – buying a GmbH is uncomplicated.