OHG! This Guy listed different Types of Companies in Germany, you won’t believe what happened next…
When moving to Germany in order to work here, it might be helpful to know a little about the types of companies you might encounter. That’s why we thought we’d provide you with a short overview. When we speak of company types, we refer to the legal form. In Germany, we differentiate between individual companies or enterprises (Einzelunternehmen), private companies or partnerships (Personengesellschaften) and (stock) corporations (Kapitalgesellschaften). Let’s start with the individual enterprises.
There is actually only one form of individual enterprise, which is surprisingly called: individual enterprise. This type of company is mostly interesting for free-lancers and single entrepreneurs such as artists or craftsmen. The advantage of this legal form is that you have full control over your business. But you are also completely and personally liable for it.
The Gesellschaft bürgerlichen Rechts is the equivalent of a simple business partnership, basically at least two entrepreneurs working together. The bureaucratic challenges are limited when founding and running a GbR and you don’t need starting capital. The downside of the relative legal freedom is that every partner remains fully liable. The GbR is very popular among start-ups and founders.
The Partnergesellschaft is not seen as often as the GbR for example. It is specifically interesting for freelancers from different trades partnering up. The PartG is more complicated in terms of bureaucracy but offers advantages as well. The company can be registered and the company’s capital is liable before any personal responsibilities.
The Offene Handelsgesellschaft has a high esteem among credit institutions and business partners. The reason is that members of an OHG are personally liable for their businesses actions. Unlike the GbR, the OHG is entered into the commercial register.
The Kommanditgesellschaft is made up of the general partner, who is leading the business, and the limited partners. The latter hold shares in the company but are only liable to the extent of those shares. Only the general partner is fully liable.
The “Gesellschaft mit beschränkter Haftung, short GmbH, is probably the best-known type of company in Germany. It’s British or American equivalent would be the limited company. If you want to found a GmbH you need starting capital and are facing a number of bureaucratic hurdles, but are afterward not personally liable to the extent of the company’s capital.
GmbH & Co. KG
Similar to the KG, the Gesellschaft mit beschränkter Haftung & Companie Kommanditgesellschaft is a company for entrepreneurs who need extended capital. The limited partners provide the minimum capital for the GmbH (25.000 €), which is the liable body of the company.
The Unternehmergesellschaft is a version of the GmbH. This legal form is suitable for small companies especially. You need only a minimal starting capital (1 €). The company is liable to the extent of its assets, but to be granted a credit you often need private securities to back your application up.
The Aktiengesellschaft is a stock company. Apart from the large corporations, the AG can be a feasible alternative for medium-sized-companies. In this case, the company is not a member in a stock exchange and the shareholders usually are employees or clients of the company. There have to be an executive board, as well as a supervisory board and to found an AG you need a starting capital of at least 50.000.
The eingetragene Genossenschaft (registered cooperative) serves as a legal form for teams of company founders and for a means of cooperation for small and medium-sized companies. It has numerous similarities to the registered association.