Stock Corporation (AG)
Aktiengesellschaft
Company formation in Germany
The AG is best suited for: Companies planning an IPO or public capital raise, Large enterprises with multiple investors, Businesses requiring a supervisory board structure, International groups seeking a prestigious German vehicle. Subject to the same tax regime as a GmbH: approximately 30% combined corporate income tax, solidarity surcharge, and trade tax. Dividend distributions to individual shareholders are subject to a 25% flat withholding tax (Abgeltungssteuer) plus 5.5% solidarity surcharge. The AG may benefit from participation exemptions on dividends received from subsidiaries (95% exemption under certain conditions).
- Companies planning an IPO or public capital raise
- Large enterprises with multiple investors
- Businesses requiring a supervisory board structure
- International groups seeking a prestigious German vehicle
Key Facts
Step-by-Step Formation Process
Draft the articles of incorporation
Prepare the Satzung (articles of incorporation) defining the share capital structure, par value of shares, governance bodies, and business purpose. The AG requires both a management board (Vorstand) and a supervisory board (Aufsichtsrat).
Notarial certification and founding meeting
All founding shareholders attend a notarised founding meeting. The notary certifies the articles of incorporation, records the subscription of shares, and documents the appointment of the first supervisory board and auditor.
Appoint supervisory board and management board
The supervisory board (minimum three members) is appointed by the founders. The supervisory board then appoints the management board (Vorstand). Companies with more than 500 employees must include employee representatives on the supervisory board.
Deposit share capital
Open a bank account and deposit at least 25% of the nominal share capital (€12,500 minimum). Contributions in kind require an independent auditor’s valuation report.
Commercial register filing
The management board files the registration application with the Handelsregister through a notary. The application must include the formation report, auditor’s report (if applicable), and bank confirmation.
Tax and regulatory registration
Register with the Finanzamt, obtain a trade licence, and comply with any sector-specific regulatory requirements. Listed AGs must also register with BaFin (Federal Financial Supervisory Authority).
Required Documents
- Articles of incorporation (Satzung)
- Notarised founding protocol
- Formation report (Gründungsbericht)
- Auditor’s formation examination report
- Bank confirmation of capital deposit
- Supervisory board and management board appointments
- Passport copies and background details for all board members
- Proof of registered office address
- Tax registration questionnaire
- Trade licence application
Cost Overview
Tax Treatment
Subject to the same tax regime as a GmbH: approximately 30% combined corporate income tax, solidarity surcharge, and trade tax. Dividend distributions to individual shareholders are subject to a 25% flat withholding tax (Abgeltungssteuer) plus 5.5% solidarity surcharge. The AG may benefit from participation exemptions on dividends received from subsidiaries (95% exemption under certain conditions).
Pros & Cons
- Ideal structure for raising public capital through share issuance
- Shares are freely transferable, facilitating investment and exit
- High prestige and international recognition
- Clear separation between management and oversight through dual board structure
- Can issue bearer shares and different share classes
- Suitable for large-scale operations with complex ownership structures
- €50,000 minimum share capital requirement
- Mandatory supervisory board with at least three members
- Significantly higher formation and ongoing compliance costs
- Annual general meeting and extensive reporting obligations
- Mandatory statutory audit regardless of size
- Complex governance requirements under the Aktiengesetz (Stock Corporation Act)
Other Structures in Germany
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