GmbH oder UG gründen

Founding a GmbH or UG – steps in detail

In this article, we look at the formation of a GmbH or UG in detail. If you want to set up a GmbH or UG, follow the steps below:

1.Find a notary
2. Determine the details of the company
3. Procedure at the notary appointment
4. Open a bank account and pay in the capital contribution
5. Submit the registration to the local court
6. The local court takes action
7. Entry of the company in the commercial register
8. Register the business
9. Apply for the tax number at the tax office
10. Inform the bank
11. Make an entry in the transparency register

The following description assumes that only one managing director is appointed. If there are several managing directors, the procedure is analogous. This text also refers to “the shareholders”. However, it is possible that there is only one shareholder, who may also be the managing director.

1. Find a notary

First of all, you need a notary to make an appointment for the company formation. To avoid any surprises, it is advisable to choose a notary who has specialist knowledge of company law. You should contact the notary’s office and ask for an appointment. Due to the provisions of the Money Laundering Act, the notary’s office will send you a so-called KYC (Know Your Customer) form, which you must complete. You will need to send in a copy of your ID and provide details on the KYC form about the source of the funds for the planned capital contribution. You will also need a recent confirmation of your residence.

2. Determining the details of the company

The notary’s office or the notary will ask you for the details of the company to be formed. This involves the following information:
– the company name, i.e. the name of the GmbH or UG
– the object of the company (business purpose)
– the names and addresses of the shareholders and their date of birth
– the amount of the company’s share capital and the amount of the capital contributions of the individual shareholders and whether these are paid in full or only partially
– the business address (domestic business address) of the company within Germany
– the registered office of the company, usually at the location of the stated business address
– Name, date of birth and address of the managing director(s); indication of whether they are authorized to represent the company alone and are to be exempt from the restrictions of §181 BGB (German Civil Code)
You can find a detailed explanation of the importance of all these details in another article in this series. If you would like to include further agreements in the articles of association, such as non-competition clauses, exclusion of shareholders or provisions in the event of inheritance, you should seek appropriate advice. The notary’s office will send the draft documents to the parties involved and you will have the opportunity to make changes. It is highly advisable to check all data carefully, as errors can also occur. Please note that many notaries will only make an appointment once you have approved the content of the documents.

3. Procedure at the notary appointment

At the notary appointment, the shareholders and managing directors must identify themselves, so they should not forget their ID or passport. If the company is founded online, the persons will be identified electronically before the appointment.
The notary will read out the articles of association or the sample minutes at the meeting. This is the last time at which changes can be made. All shareholders will sign the company’s articles of association at the notary’s office. It is usually agreed that the formation costs (notary fees, registration fees, business registration) will be covered by the company up to a certain maximum amount. This makes sense as the costs are tax-deductible as business expenses.
At the same time, the notary will also hold the first shareholders’ meeting. The managing director(s) will be appointed and their right of representation (individually or jointly) as well as their exemption from the restrictions of §181 BGB (German Civil Code) will be determined.
The managing director also signs the company’s application to the commercial register and confirms that he has not been convicted of certain criminal offenses (insolvency offenses, fraud, false statements) and that he has not been banned from trading.
The list of shareholders – i.e. the list of the company’s shareholders – is also signed by the managing director. This is not necessary for the sample protocol, as it is already considered a list of shareholders.

4. Opening of a bank account and payment of the capital contribution

After notarization, the notary’s office will prepare the notarization documents and send them to you in the next few days.
The managing director will need these notarial documents to open an account for the founding company and will also have to identify himself to the bank. You have the choice between an online bank or a traditional commercial bank. Online banks offer a faster process, but you should make sure in advance that the bank also offers an account for a company in formation and familiarize yourself with the fee model.

The account for the GmbH or UG in formation (i.Gr.) is now opened. Each shareholder now pays in the capital contribution to be made. The intended use should be “share” or “company shares X-Y”, where X and Y stand for the serial numbers.

5. Transmission of the application to the local court

The managing director has already signed in advance at the notary appointment that the amount of money to be paid in is at the free disposal of the managing director. As this circumstance has now occurred, the notary transmits the already signed registration of the company with this assurance to the commercial register of the competent local court. This is done electronically.

6. The local court takes action

The local court can send the founding company an advance invoice for the commercial register fee. At this point at the latest, it is important that the mail can actually be delivered to the domestic business address stated in the commercial register application. It is therefore essential that the letterbox is labelled with the full name of the company, including “GmbH” and “UG (limited liability)”. If the local court’s mail cannot be delivered, the local court will have doubts about the company’s address and may refuse registration until clarification is obtained. The judge at the local court examines the application and the articles of association and, in the positive case, makes the entry in the commercial register. You can also regularly check the register portal (handelsregister.de) to see whether your company is already registered.

7. Entry of the company in the commercial register

As soon as the company is registered, the notary will inform you. You will receive an excerpt from the commercial register of your company. You can call up an up-to-date extract from the commercial register at any time later via the register portal – free of charge. Only on the date of entry in the commercial register does the corporation begin to exist as such and have the desired limitation of liability. The person who entered into the transaction is liable for all transactions and liabilities that arose before this date. Transactions should therefore only be entered into after entry in the commercial register. Registration in the commercial register also marks the beginning of the period of fraudsters who send the company an alleged invoice from the commercial register in order to entice you to transfer fees. Some of these fraudulent invoices are identical 1:1 to the actual invoices, except that it is not the account number of the relevant judicial fund to which the transfer is to be made. You can find the correct account number on the website of the relevant local court.

8. Register your business

As the managing director, you can now register your business with the local trade authority (municipality, city). This is usually possible via the Internet. An extract from the commercial register is required for this.

9. Apply for the tax number at the tax office

The tax number must now be applied for at the tax office. This is only possible via the Elster portal (elster.de). The managing director should have already set up access to the Elster portal in advance to save time. In the Elster portal, the form “Questionnaire for tax registration – formation of a corporation or cooperative” must be selected and completed. In addition to providing the company’s known data, the form asks for an estimate of the expected profit and turnover in the year of formation and the following year. For many entrepreneurs, this is indeed difficult to predict. You should proceed rather defensively here (i.e. do not overestimate), as the advance payments for corporation tax and trade tax are determined on the basis of this information, which you then have to pay to the tax office on a quarterly basis. If you expect sales of less than EUR 600,000 per year, you should opt for actual taxation (payment of VAT according to the amounts received). The question of the number of employees in the company determines the period for which wage tax must be declared and paid (monthly, quarterly or annually). If you are unsure about any of these questions, you should contact a tax consultant now at the latest.

10. Inform the bank

To ensure that the addition “i.Gr.” (in foundation) is removed from the account name of the company’s bank account and the debit block is lifted, you should send the bank the extract from the commercial register and ask for the addition “in formation” to be removed.

11. Make an entry in the transparency register

The transparency register (transparenzregister.de), to which the managing director must report the so-called “beneficial owners” of the company, should not be forgotten. This must be done even if the shareholders are only natural persons, and this fact is also evident from the commercial register. This obligation should not be taken lightly, as non-compliance can result in severe fines.

The foundation has been completed

Once you have completed all these steps, your GmbH or UG is now fully established. You will be contacted by other bodies (e.g. Chamber of Commerce, Public broadcasting fee), but this is already part of the ongoing operation of the company.