The Unternehmergesellschaft (UG) haftungsbeschraenkt is a limited liability company under German law which can be established in accordance with the German law on limited liability companies (GmbH-Gesetz, GmbHG). The UG was established as the „small” sister of the general limited liability company in Germany, the Gesellschaft mit beschraenkter Haftung (GmbH) in order to facilitate the easier foundation of a limited liability company for start ups. The main benefit of the UG in comparison to its „bigger” sister GmbH is that for the foundation of the UG the minimum registered capital is EUR 1, while for a GmbH the minimum registered capital is EUR 25.000 of which at least EUR 12.500 need to be paid in at foundation. While foundation of the UG is possible with only EUR 1 it is highly recommended to have at least a registered capital of EUR 550 in order to cover the initial costs of foundation and the first year of the existence of the company. This can avoid immediate over-indebtness of the company which otherwise could be avoided by granting shareholder loans with a qualified subordination clause to the UG.
The benefits of the UG for a start up are that it provides its shareholders with limited liability, i.e. only the UG is liable to creditors for the liabilities of the UG. The UG is managed by one or several managing directors which can be shareholders. It is possible that the only shareholder of the UG is also the sole managing director of the UG. The managing director(s) can be granted the right to contract with themselves or with another company where they hold the office of managing director by the shareholders’ meeting. The shareholders’ meeting can control and direct the managing director(s) within the boundaries of the applicable law. The applicable law will for all corporate law matters be German law. In regard of other actions taken by the managing director(s) of the UG other laws can be applicable.
But for a minimum of mandatory parts (seat, company name, company purpose, registered capital) the articles of the UG can be developed independently by the shareholders. To amend the articles a majority of 75% of the shares present in a relevant shareholders’ meeting. For purposes of e.g. venture capital financing e.g. tag along rights, drag along rights and liquidation preferences could be included in the articles; it can be advisable though to agree on such rights in a separate shareholders’ agreement in order not to have these rights accessible for everyone via the commercial register.
The UG is generally subject to German corporate tax of 15%. Distributions of profits to shareholders would generally be taxed with 25% at the level of the receiving shareholder. Where profits by the UG are generated outside of Germany, the taxation of these profits is subject to any existing double taxation treaties. The same applies to the taxation of distributed profits on the shareholder level if the shareholder is not a tax resident of Germany. In exception from the general rule dividends, exit proceeds and capital gains which the UG receives are only taxed with 5 percent non-tax deductable expenses which results in an effective taxation of approx. 2.75%.
Overall, the UG therefore is a great choice for company foundation in Germany for start ups or as an investment vehicle for investments in Germany and beyond.
Company formation in Germany is simple and quite straightforward. Contact us for further information at: startupr.com
We are happy to announce that Startups team on Kiva has made a loans worth of 1,700 USD. Thanks to all of our co-workers.
You can see more at: http://www.kiva.org/team/startups
Become one of us and support another entrepreneurs with lower opportunity to a finance.
Each startup needs a financial support regardless where you are located or what you do! Here we are!
About Kiva – “We are a non-profit organization with a mission to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world. Learn more about how it works.”
We know that it’s quite stressful if you start a new company and you are without finance. Kiva is really good oportunity how to raise a small amount of money.
Your Startupr & here check our Kiva’s team
On 6th of June, Startupr has given company formation advices to Startupyard. StartupYard is a mentorship based acceleration program for tech startups. Founded in 2011 StartupYard (by Hudecek, Ocasek) provides support for 5 to 8 startups in exchange for equity every year.
Do you run an incubator and need some advices in regards with company formation. Please let us know and we will be more than happy to answer your question during our conference call. We will set up the conference call meeting and discuss your questions.
Have a great and successful week
Our ambitious team specialised in graphic logo design is leaded by two golden rules:
– High level of individual customer service
– Adequate response of your expectations
Being one of the basic elements for business identity, every logo must be unique designed specifically for a certain company, representing in synthesis the business activity or the essence of the product, to communicate easily with a maximum range of potential audiences, to contain simple and distinct expression , to manifest plasticity, aesthetics, colour effects. A well-established logo will help you to reply the high demands of professionalism defined by thecontemporary marketing industry, to be a step ahead of your competition, to increase the trust of your customers, to be globally recognizable and memorable.
For all that you can count on our support
Without doubt in STARTUPR we found a responsible and trustworthy partner. We are 100% confident in their professionalism, competence, awareness and good fast results. Every business success is easily achievable with helpful partnership.
Keewire is a dynamic company specialised in new Technologies. Our members are digital nomads, coming from all over the world.
Our mission is to help and assist you through all your IT and internet needs. Please visit http://www.keewire.com for more details.
I came accross Startupr services through a google search and i have to say it’s the best service ever. Tomas was very patient and helpful.
– He helped me understanding and registrating our company in Hong-Kong.
– He was very patient with me, even after 20+ emails
– He was very clear about the price for the registration
– He pointed me to right direction for getting certified versions of some documents.
Thanks to his honesty, i was able to get a very personalized service, and only pay what i was needing.
I definitely recommend working with Startupr, because they are : low cost company formation provider, efficient, quick and professional.
Your company formation provider – Startupr.com