Opex not Capex: The new German limited

Newest information about Mini GmbH foundation: On 10-28-2008 the law for modernization of the federal gazette was published and therefore it became effective as of 11 November 2008.

On 26 June 2008, the German Bundestag has decided upon the "law for the modernization of the GmbH act and rejecting abuses, briefly called " MoMiG ". After enacting of the law by the Bundesrat it became effective in November 2008. It now is possible, to set up a "Mini GmbH", officially called business corporation (Unternehmergesellschaft = UG).

The Mini GmbH is a kind of sub-form of the regular GmbH. The difference is the amount of the share capital. It amounts to at least one Euro for the Mini GmbH and at least 25,000 Euros for the "regular GmbH".

Assets in any kind are not permitted for the Mini GmbH. The registration at the trade register can only be carried out when the share capital was paid in full amount. The mini-GmbH is a legal body of its own. It must therefore settle all its liabilities from its corporation capital. This form of the liability is very important for many shareholders - founder of a new business - since the fear of the personal liability often prevents the step into the independence. It must sign with the addition "business corporation (liability restricted)" (also possible in the right and commercial traffic: "UG (liability restricted)".

This shall inform possible business partners about the limited liability. The Mini GmbH must retain a quarter of its gained profit per year. The regulation of the reserves has been planned by the legislator. In this way the amount of the share capital of the regular GmbH (25,000 Euros) shall be reached. If this has happened, the "business corporation (liability restricted)" can be converted into a regular GmbH. For foundations with at most three shareholders a sample protocol can be used. This contains the statute, the shareholder list and the managing director order and must be certified notarially.

- is a new kind of GmbH
- saves the shareholder of personal liability
- requires a capital stock of only one Euro
- It must sign with the addition "business corporation (liability restricted - UG )
- The Mini GmbH can be converted to a regular GmbH, if the capital stock of 25.000 Euro has been reached ( until this point a quarter of the annual surplus must be retained)

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