Establish "Mini-GmbH"
The Mini-GmbH is the German alternative to the English Limited and is correctly called an entrepreneurial company. It offers start-ups a platform for an easy start. If you set up such a company, you must also know the risks and act purposefully.
The Unternehmergesellschaft (UG) has existed since 2008 and is often referred to as a mini-GmbH in relation to the conventional GmbH. Critics feared that the entrepreneurial society promotes "the frivolity in dealing with entrepreneurial decisions". Since this criticism is not unjustified in view of the way in which the mini-GmbH was founded, you should know how to handle such a mini-GmbH.
€ 1 is sufficient for the share capital of a mini GmbH
- You can set up the Mini-GmbH with a share capital of at least one euro (GmbH: € 25,000). But: Many model contracts stipulate that the company bears the start-up costs. Since these regularly amount to around € 200, many UGs are already over-indebted when they are founded.
- You should therefore notarize a share capital at least in the amount of the formation costs. This is the only way to avoid later accusations that you were ready for bankruptcy when you founded the company.
Establish a model partnership agreement
- When establishing the company, you can fall back on a standardized model partnership agreement, which the notaries can hold ready for one or more partners. It comprises three pages and serves as a partnership agreement, list of shareholders and appointment of the managing director all in one. The standard pattern guarantees cost savings and quick registration.
- Please note that you have to keep a quarter of the annual profit as a reserve in the Mini-GmbH. In this way, your mini GmbH grows into a full GmbH over time. If the reserve is € 25,000, the Mini-GmbH can be converted into a GmbH.
- Establishing with contributions in kind is excluded. Your mini GmbH can only be set up with cash.
- As a corporation, the Mini-GmbH is obliged to keep double-entry bookkeeping and must prepare balance sheets. Distributions of profits to shareholders are subject to the withholding tax or the partial income method. In these cases, you must therefore seek advice on tax matters.
GmbH share capital - this is how it is used
The share capital determines the intrinsic value of a GmbH. With a proper ...
A UG is not considered creditworthy
- You have to know that credit institutions react very skeptically to mini-GmbHs and, given the mostly low share capital, question their creditworthiness. If you cannot provide any personal security, your Mini-GmbH is not creditworthy.
- Due to the low share capital, mini GmbHs are prone to insolvency. Your insolvency rate is up to five times higher than that of the GmbH. If your Mini-GmbH is insolvent or over-indebted, you as the managing director must file for bankruptcy within three weeks and you are liable to prosecution if you delay this deadline.
Always keep your perspective in mind
- If you found a mini GmbH, you have to know that such a company is only practicable for the start-up phase and places high demands on the management. In perspective, you always have to keep an eye on the development of a GmbH.
- So think about whether you don't drive better as a sole proprietorship. You are personally liable, but as the managing director of a mini GmbH you are also liable in many cases if you are accused of personal misconduct. And accusations of this kind are the order of the day in practice. As a sole proprietorship, for example, you are not required to file for bankruptcy and, like many GmbH managing directors, you avoid being criminalized by the judicial bureaucracy.
