Legal forms of business enterprise

Sole proprietorship (Einzelunternehmen)

What

If you open a business alone, either as a business person or as a freelancer, this automatically means sole proprietorship. It is easy to establish a sole proprietorship. This is carried out when
business people register their commercial activity with the Trade Office
freelancers apply to the Tax Office for a tax number
As a sole proprietor you are fully liable with all your assets, including your private assets. You are required to register your company in the Commercial Register [Handelsregister]. By registering in the Commercial Register, you assume all the rights and obligations of a merchant. For more details regarding this matter, please contact the Chamber of Industry and Commerce. Small businesses with simple and limited business structures as well as freelancers who are members of the liberal professions are not registered in the Commercial Register.

Where

Trade Office [Gewerbeamt],
Landeshauptstadt München, Kreisverwaltungsreferat (KVR), Hauptabteilung I, Sicherheit und Ordnung. Gewerbe, Gewerbeangelegenheiten, Gewerbemeldungen (Department of Public Order)
Ruppertstraße 19, 80337 München,
T +49 89 233-96030

Limited liability company (GmbH) or a provisional company with limited liability (Unternehmergesellschaft (haftungsbeschränkt) UG)

What

A GmbH or UG company is established by at least one shareholder. The UG company is subject to the law that governs limited liability companies. The articles of association for both the GmbH and the UG company must be notarised. The notary forwards the articles of association to the Commercial Register. The minimum capital requirement for the GmbH is €25,000 (2017); the minimum initial contribution for the UG is €1 at the time of its establishment (2017). The UG company is then required to appropriate 25 percent of its profits to a statutory reserve until the required minimum capital of €25,000 has been generated (2017). The UG company can then be converted to a GmbH company.

Where

Civil law partnership (GbR)

What

If you are joining forces with one or more partners, you will automatically form a civil law partnership (Gesellschaft bürgerlichen Rechts) (GbR or civil-code company). A civil law partnership can be established both by business people and by freelancers. There are no special formalities that apply to this kind of company. A written agreement is, however, recommended and there is no minimum capital requirement. All of the partners are liable with their private assets for all of the company’s debts (e.g. tax debts). Special rules can be agreed to in the articles of association (internal relationship).

Where