Starting a Business in Berlin

32 33 Starting a Business in Berlin A Beginner’s Guide N.B.: Legislation provides both ‘specimen documenta- tion for the formation of an one-shareholder compa- ny’ and ‘specimen documentation for the formation of a company with up to three shareholders’. The partners can also form the company by drawing up an individual memorandum of association, which must be certified by a notary. When setting up a mul- ti-shareholder company, we recommend drawing up a GmbH agreement that is tailored to your individual requirements. This agreement can include additional provisions that go further than the minimum specifi- cations required by law for the articles of association of a GmbH, thereby precluding potential differences of opinion between the partners later on. Entrepreneurial company with limited liability (UG (haftungsbeschränkt)) This legal form is a specific type of GmbH. Essentially, the same strict rules apply as for a GmbH, but the minimum capital required when setting it up is just €1, and ‘specimen documentation’ can be used to facilitate its formation. If there is more than one partner, however, one should think carefully before using the specimen documentation, as it does not – for instance – contain any regulations about dea- ling with disputes. ls Management by the general partner ls A company name in the legal sense can be used ls Notification of the regulatory agency (Ordnungsamt) is mandatory and, if required, licences must be obtained by all general partners Limited liability company (GmbH) It is no accident that the GmbH is the most popular legal form in Germany after the sole proprietorship. This is becau- se liability is restricted to the level of company assets. In the case of insolvency, creditors cannot generally access the private assets of the partners, but only the total assets of the business, in other words the share capital at the very least. The minimum share capital is €25,000, at least half of which has to be deposited when the company is started up. This can be made up of material assets instead of cash. Profile of a GmbH ls Suitable for one or more business partners ls Minimum capital of €25,000 required ls Listing in the Commercial Register required ls The company has a legal personality (is a legal entity) ls No personal liability on the part of the partners (in normal circumstances) ls May be managed by an employee ls A company name in the legal sense can be used ls Notification of the regulatory agency (Ordnungsamt) is mandatory and, if required, a licence must be obtained by the managing director of the GmbH CHAPTER 3