What are the different types of societies

Legal forms for companies: GbR, GmbH, OHG & Co.

We want to look at the following legal forms for companies in the overview in this article:

  • one-man business
  • Civil Law Society (GbR)
  • Open trading company (OHG)
  • Limited partnership (KG)
  • Limited Liability Company (GmbH)
  • GmbH & Co. KG
  • One-person GmbH
  • Entrepreneurial Society (UG)
  • Limited
  • Partnership company (PartG)
  • registered cooperative (eG)
  • Joint-stock company)

Which legal form suits my company?

Starting a business has many advantages. With a trade license alone, you can claim tax advantages, for example for business lunches, office equipment or business trips. You will become a member of the Chamber of Commerce and Industry, but only pay membership fees above the one-time basic fee if you have an annual profit of more than 5,200 euros. Membership in the IHK is compulsory, but it also has the advantage that you get access to their diverse range of courses and advice.

If your business concept provides for larger amounts of money to flow regularly or if you are taking larger financial risks with your start-up, it makes sense to think about the right type of company. Because then there is not only the question of tax, but also of liability. Even if you are not setting up a business alone, the chosen legal form is relevant. Because some legal forms, above all the "sole proprietorship", do not provide for further participants.

Register a business in 3 steps

Step 1: fill in the business registration

You can download the business registration from the Internet and fill it out before visiting the trade office. The most important data in this form include information about the owner and the company as well as information about you personally. After you have entered the address of your company and formulated the exact activity, all that is missing is whether your business needs a specific permit. This would be the case, for example, with a license for a bar.

Step 2: Observe all the necessary formalities

In addition to the business registration form, you must have other documents with you for your appointment at the trade office. On the one hand, you need your identity card or passport so that you can prove your identity. On the other hand, you should have all the necessary permits and permits with you, such as the craft card, the trade card or an extract from the commercial register.

Step 3: Appointment at the office

Now you can make an appointment with the responsible office with all the necessary documents. This will check your data and then issue a trade license. In addition, you must not forget that you also have to report your trade to the health insurance company. Here you will again receive forms to fill out. Otherwise, the trade office automatically forwards your information on the trade to all other offices and institutions, such as the tax office, the chamber of commerce and the chamber of crafts.

An overview of the legal forms for companies in Germany

At this point we give you a compact overview of the legal forms for companies that you can choose in Germany. This should make it easier for you to choose the right form for your company.

1. The sole proprietorship

The sole proprietorship is the simplest of the legal forms in Germany. Basically everyone who starts a business is a sole proprietorship.

When do I have to register a sole proprietorship in the commercial register?

If your business does not just run under your real name or your job title, but should become a real company with a company name, you have to be entered in the commercial register. However, the entry is optional for small businesses and freelancers. Name, legal form, owner and company headquarters are entered in the register. In addition, the entry also provides information on whether bankruptcy proceedings are currently in progress. The option of being able to obtain more detailed information about the company as a third party means that the entry in the commercial register is linked to more seriousness. As can be deduced from the term “sole proprietorship”, with this legal form only one person can act as managing director.

Who is liable in what amount at the sole proprietorship?

With the legal form of sole proprietorships, unlimited liability applies to private assets. The sole proprietorship is therefore liable with all of his private assets for all liabilities within the company.

When can you set up a sole proprietorship?

Basically everyone is a sole trader who starts business and does not choose a particular legal form. After registering with the trade office and tax office, you can start immediately.

Is there a minimum capital requirement for sole proprietorships?

Accordingly, no minimum capital is required for sole proprietorships. So you can start your company completely without money.

2. The civil law society (GbR)

The civil law partnership is the simplest legal form of partnerships. It is often chosen by non-commercial entrepreneurs.

What is a civil law society?

If you want to start up with one or more partners, the GbR is a suitable legal form. Entry in the commercial register is optional for companies under civil law. The formalities are also kept to a minimum. However, the Federal Ministry for Economic Affairs and Energy recommends on its founder portal existenzgründer.de to negotiate a contract between the parties involved. After all, the GbR is not only liable with the company's assets. The private assets of their founders are also used for liability.

Who is liable to the civil society and to what extent?

As with sole proprietorships, all partners are liable with their private assets in a civil law company. This means that the creditors can theoretically demand their money from any founder.

Is there a minimum capital requirement for civil society?

Here, too, there is no rule that specifies a certain start-up capital. That is why the founders can start their company without any money.

3. The open trading company (OHG)

The general partnership is also a partnership, but all shareholders can verbally agree on anything.

Who is a general partnership for?

The open trading company is another legal form for which no minimum capital is required. Establishing with business partners is also permitted. However, only merchants can set up a general partnership. It is therefore not suitable for small businesses. There is liability here first with business and then with private assets. The fact that the OHG has to be entered in the commercial register and the parties involved are also privately liable gives the OHG a good reputation. Those who are personally liable, according to the logic, show a correspondingly high level of commitment and act responsibly instead of taking risks.

Who is allowed to set up a general partnership?

For a general partnership, at least two people must join forces. As soon as both or all shareholders agree that they want to start the company together, the company is considered to have been founded.

Who will take over the management of the open trading company for you?

Theoretically, with this legal form, management is taken over by all shareholders involved. If this is to be regulated differently, this must be defined more precisely in the articles of association.

4. The limited partnership (KG)

This legal form is also a partnership, which is often chosen when the leading founder needs an additional partner who is only supposed to bring his money into the company.

Who is liable in a limited partnership?

For start-up projects in which one or more people are involved and in which further partners are to be added, the limited partnership is a possible legal form. Here the company consists of the general partner or several general partners who act as managing directors and the limited partners who have a stake in the company. The general partner or general partners bear the greatest risk. They are liable with their private assets. The limited partners, on the other hand, are liable with their contributions. The advantage here is the possibility of being able to set up a business with more start-up capital.

Who takes over the management of a limited partnership?

In this case, the general partner is responsible for the management and represents the company in all matters. The commanders, however, only have control rights.

Does the limited partnership (KG) have to be entered in the commercial register?

An entry in the commercial register is mandatory for the limited partnership.

5. The limited liability company (GmbH)

The limited liability company is a corporation that is easier to set up than a public company.

What is a Limited Liability Company?

The GmbH offers the great advantage that the entrepreneur is not liable with his private assets, but instead with the entire company assets. A capital contribution of at least 25,000 euros is required to set up a GmbH. It is only when loans are taken out that private collateral is required.

Does the GmbH have to be entered in the commercial register?

To found a GmbH is connected with the entry in the commercial register and the obligation to double-entry bookkeeping. But this can also bring tax advantages.

Who can establish a limited liability company?

A limited liability company can only be formed by one person. Here, however, any number of people can appear as shareholders. A articles of association must be notarized for this.

6. The GmbH & Co. KG

This legal form is a hybrid of two legal forms.

What is a GmbH & Co. KG?

As the name suggests, this legal form is a mixture of a limited partnership and a limited liability company. It makes it possible to bring more investors on board as shareholders and to make the GmbH the liable general partner, who then also has the power to make decisions.

Who is liable in a GmbH & Co. KG?

In the case of the GmbH & Co. KG, the GmbH becomes a general partner and as a so-called general partner GmbH is only liable to a limited extent in the amount of its capital. In a normal KG, however, the general partner has unlimited liability with his private assets.

Does a GmbH & Co. KG have to be entered in the commercial register?

The GmbH & Co. KG must be entered in the commercial register like a normal GmbH. With the entry, the rights and obligations of the Commercial Code apply.

7. The one-person GmbH

The one-person GmbH is a customary GmbH, with the difference that it is founded by a single person. This type of GmbH is therefore suitable for sole proprietorships for whom it is a tax advantage to act as the sole employee of the GmbH. As with the regular GmbH, you are therefore liable with all of the company's assets. In addition, you have to raise at least 25,000 euros in capital, register yourself in the commercial register and keep double entries.

8. The entrepreneurial society (UG)

The entrepreneurial company is a special form of the GmbH and is also one of the corporations.

How high is the share capital in an entrepreneurial company?

This legal form is also called 1-Euro-GmbH. It is suitable for everyone who wants to limit liability, but cannot or does not want to raise a 25,000 euro capital contribution. A capital contribution is also mandatory at the UG, but the minimum amount is one euro. Here, however, the founder undertakes to use 25% of his annual surpluses to build up share capital.

Who can set up an entrepreneurial company?

An entrepreneurial company can already be founded by a partner. However, several founders are also possible.

What is the liability of an entrepreneurial company?

In the case of the entrepreneurial company, the company's assets are also liable. This makes this legal form particularly attractive for small founders.

9. Limited

The Limited is a corporation and an English legal form. She is partnered with Ltd. abbreviated and is the counterpart to the German entrepreneurial society (UG).

How can you set up a limited company?

If you want to set up a limited company, you don't need an English passport. However, an office address in Great Britain is a prerequisite. However, the founder does not have to rent an office in the country himself, because there are now a large number of service providers who provide a deliverable postal address. In addition, the founder must register with the commercial register and the trade office in Germany.

Who is liable with a limited company?

As far as liability is concerned, the founders and other co-partners are only available with the contribution. There is no liability with private assets with this version of the legal forms. So if you start your company with just one pound of share capital, you are only liable with this amount.

What does it cost to set up a Limited?

Setting up a limited company is comparatively very cheap. Many agencies offer a starter package from 300 euros. This includes one-time formation formalities in the amount of 100 euros. In addition, there are 200 euros for ongoing service fees, such as an office address. There is no mandatory start-up capital with a limited company. One pound is enough to set up a limited company.

10. What other legal forms are there?

For the sake of completeness, there is also an overview of those legal forms that are usually less interesting for founders:

For members of the liberal professions, i.e. doctors and other health professionals, lawyers, architects, journalists and others, thePartnership company (PartG) the possibility, insofar as the professional code permits, to set up a joint venture.

From three founders, or in this case three comrades, the foundation is one registered cooperative (eG) accordingly possible. For this purpose, however, a statute must be drawn up in which it must also be recorded how high the cooperative contribution is, how far the cooperative's liability goes and how the legally binding general assembly takes place. An entry in the cooperative register is necessary and, like other corporations, the registered cooperative is obliged to draw up annual financial statements, which are also checked by a cooperative association. The implementation of the corporate goals set out in the articles of association is also binding.

The Joint-stock company) as a legal form involves a similar bureaucratic effort as the cooperative. Instead of a statute, a partnership agreement is used here. 50,000 euros of share capital are required to found an AG, whereby the liability for the individual shareholder is limited to a sum equal to his contribution. There is also the variant of the "small AG" for individual founders.

In the Holding It is not a legal form, but it can also be relevant for founders. This comes into question when a company wants to open up a new business area. Then the original company becomes a parent company and the further company becomes a subsidiary.

How do you change the legal form?

If the conditions change, it is of course possible to change the legal form. This happens according to the Transformation Act (UmwG). Reasons for the change in legal form can be, for example, a strong growth of the company or the planned addition or departure of participants.
In some cases, the legal form also changes automatically if the activity changes or one of the parties involved is involved in the company on different terms. A GbR that takes up a commercial business thus becomes an OHG. While a KG and an OHG, which give up their trade, become a GbR. Precise preparation is worthwhile in order not to lose track of the individual legal forms.

Summary: An overview of the legal forms and their options

Since that was a lot of information about the different legal forms for companies, here is a short summary with the most important information about the individual legal forms:

One-man business:

  • Decision-making authority:Sole decision-making power of the owner
  • Liability:unlimited with business and private assets
  • Number of founders:1
  • Capital / minimum deposit:no fixed capital, no minimum investment required

Civil Law Society (GbR):

  • Decision-making authority:Joint management and representation by all shareholders
  • Liability: Society and shareholders (including private assets) for corporate debts
  • Number of founders:at least 2
  • Capital / minimum deposit:no fixed capital, no minimum investment required

Open trading company (OHG):

  • Decision-making authority: Individual management of each partner
  • Liability: Society and shareholders (including private assets) for corporate debts
  • Number of founders: at least 2
  • Capital / minimum deposit: no fixed capital, no minimum investment required

Limited partnership (KG)

  • Decision-making authority: General personally liable partners; In certain cases, participation of the limited partners is required
  • Liability: General partners (personally liable partners) unlimited, limited partners, however, in the amount of the contribution
  • Number of founders: at least 2
  • Capital / minimum deposit: No fixed capital, no minimum investment, but limited partner contributions for limited partners

Limited Liability Company (GmbH)

  • Decision-making authority: Managing director business policy: shareholders' meeting
  • Liability: only with company assets; if applicable, personal liability of the managing director
  • Number of founders: at least 1
  • Capital / minimum deposit: Minimum share capital: 25,000 euros, at least 12,500 euros must be paid in cash or in kind upon formation

Entrepreneurial Society (UG)

  • Decision-making authority: Managing director business policy: shareholders' meeting
  • Liability: only with company assets; if applicable, personal liability of the managing director
  • Number of founders: at least 1
  • Capital / minimum deposit: Minimum share capital: 1 euro, full payment required upon formation, only cash formation possible

Let us advise you!

If it becomes apparent that your start-up project is larger or riskier or you want to appear under the name of your company, you should think about the right legal form and get an overview. Of course, it is part of this that you do your own research in this case. For this purpose, this article should give you an initial overview of the legal forms. You can also find more information on this at the BMWi's start-up profile. The Chamber of Crafts or the Chamber of Commerce and Industry in your city are also contact points that you can turn to. At the IHK's start-up seminars, a separate chapter is usually also devoted to the possible legal forms. You can, however, discuss details with lawyers specializing in founders.

Questions and formalities

Questions that must also be answered when choosing the legal form are always:

  • How many people start?
  • How much decision-making power should the founders have?
  • Who is liable?
  • What amount of capital is required?
  • Should further capital procurement be made easier?

As we have seen above, the bureaucratic effort required depends on the type of company chosen. The establishment of an AG is, however, associated with many formalities. On the other hand, sole proprietorships, GbR, GmbH and UG (limited liability) are relatively uncomplicated when founding.


This is also reflected in the numbers. According to the Bonn Institute for SME Research, 198,203 sole proprietorships, 49,628 GmbHs, 12,645 GbRs, 10,053 UGs and 7,180 GmbH & Co. KGs were founded in 2018. This means that only 757 companies opted for a general partnership, 415 for a limited partnership, 199 for a stock corporation, 134 for a cooperative and 388 for other legal forms.

Overview of legal forms for companies: Our conclusion

Unlike working out good business ideas, dealing with the formal issues of founding a business is a very dry topic where the devil is in the details. But founders have to go through that. After all, it would be more than annoying to be liable with all of your private assets, even though it could be avoided or it would be unnecessarily difficult to raise capital. You are not left on your own when it comes to the legal form that is right for you and your business. This article should first give you an overview of the legal forms for companies and can be viewed as the first step in your research. Nonetheless, you should use at least one of the various advisory services for start-ups.