This document discusses two common forms of business entities in Germany: the limited liability company (GmbH) and the stock corporation (AG). It provides details on the establishment, management structure, accounting requirements and fields of business for each. The GmbH is well-suited for small and medium enterprises due to lower costs, while the AG is designed for large corporations since it allows obtaining large sums of capital by issuing shares.
3. Number of companies in Germany by legal form and number of
employees in 2017
0-9
employees
10-49
employees
50-249
employees
250 and more
employees
All in all
Sole
proprietorships
/traders
2.082.586 63.776 2.454 80 2.148.896
Partnerships
(OHG, KG)
324.085 54.150 12.885 2.881 394.001
Corporations
(GmbH, AG)
520.524 149.112 41.510 9.706 720.852
Other legal
forms
182.066 26.572 7.079 2.394 218.111
All in all 3.109.261 293.610 63.928 15.061 3.481.860
Source: https://de.statista.com/statistik/daten/studie/237346/umfrage/unternehmen-in-deutschland-nach-rechtsform-
und-anzahl-der-beschaeftigten/
4. Limited liability company (GmbH).
Source: https://wirtschaftslexikon.gabler.de/definition/gesellschaft-mit-beschraenkter-haftung-gmbh-36671
5. Limited liability companies. Forms.
Limited liability company
(GmbH)
Limited liability
entrepreneurial company
("Mini GmbH")
Stock corporation (AG)
Partnership limited by
shares (KGaA)
6. Establishment of Limited liability company
(Conditions.)
Minimum authorised capital of
GmbH: €25,000
Minimum authorised capital of
Mini GmbH: €1
Needed people to establish
GmbH: 1 person
11. AG. Definition and forming.
German term for a Public limited
company
At least 5 members
Minimum required shared capital:
50 000 € - with at least half paid at
registration
May be listed on the stock exchanges or
not - Kleine Aktiengesellschaft - since
1994; 1 person
12. The management board (Vorstand).
Responsible for the operational
business of the AG
Self-sufficient and independent of the
board of directors and the general
assembly
Represents the company externally
CEO =Vorstandvorsitzender – job
security – 5 years
13. The board of directors (Aufsichtsrat).
Consulting and controlling function
Appoints an auditor (he assesses the
validity of a company’s financial
statements)
Held minimum 2 times per year
Minimum 3 members (max. 21)
Personnel overlaps are possible – CEO is
often member of the board of directors
14. The general assembly (Hauptversammlung).
Represents the shareholders and
exercises their rights
Once a year or regularly scheduled
The decisions taken at the general
assembly – organisational issues,
capital reductions and increases,
allocation of profits
Decision to terminate the AG
15. Accounting requirements and Commercial
register (Handelsregister).
Balance sheet, profit and loss
statement and management
report
Certain transactions and changes
in AG must be reflected in
Commercial register
16. Stock corporations in Germany. Fields of
business.
Banking, finances and
Insurance
Automotive sector
Chemicals,
Pharmaceuticals
Technology
Source: https://www.forbes.com/global2000/list/#header:country_country:Germany
20. Conclusion.
Suited to small
enterprises, medium-
sized family companies
Lower costs
Transferring
investments must be
authenticated by a
notary (disadvantage)
Suited for large enterprises
Greater costs
Can obtain large sums of
capital and shares are easily
transferable
Better image externally -
advantageous in dealings
with banks, suppliers and
customers
Stricter regulations - German
Joint-Stock Corporation Act
(Aktiengesetz)
GmbH: AG: