Pick the right structure for your business in Germany

Pick the right structure for your business in Germany

If you want to start or develop your business, you have the choice between different legal forms. Depending on the conditions under which you are starting and the goal of your company, you have various options for choosing a legal form in Germany.

Let´s learn a bit about it:

Sole proprietorship (Einzelunternehmen)

If you are starting out on your own and without any great entrepreneurial risk, the simplest legal form for your business is a sole proprietorship. You can carry out your self-employed activity on a part-time or full-time basis as a business, freelancer or farmer.

Partnerships (Personengesellschaften)

If you are starting out as a team or if, as a previous sole trader, you would like to join forces with other people or take on financial backers, you can set up one of the following partnerships under German law:

• GbR (Gesellschaft bürgerlichen Rechts)
• oHG (general partnership)
• KG (limited partnership)

Corporations (Kapitalgesellschaften)

If you are starting out as a team or want to limit your entrepreneurial risk, the choice of a corporation is a good idea but always after careful consideration. The main characteristic of the legal forms existing under this term is the simple participation of investors in a company. For this reason, one of the following limited liability companies is often chosen by companies that wish to invest:

• UG (entrepreneurial company)
• GmbH (limited liability company)
• AG (public limited company)

Mixed forms

In addition to pure partnerships and corporations, there are also mixed forms, such as the GmbH & Co. KG. Here the advantages of the respective legal forms can be coordinated accordingly. This often happens in the case of cooperations, mergers or spin-offs of subsidiaries.

Get in touch with a specialized attorney and let him/her advice you.