Entrepreneurial Company with Limited Liability (UG (haftungsbeschränkt))
Unternehmergesellschaft (haftungsbeschränkt)
Unternehmensgründung in Germany
The UG (haftungsbeschränkt) is best suited for: Early-stage startups and solo founders with limited capital, Freelancers transitioning to a corporate structure, Testing a business idea before committing to a full GmbH, Micro-businesses and small online ventures. Taxed identically to a GmbH: 15% corporate income tax, 5.5% solidarity surcharge, and municipal trade tax, totalling approximately 30%. The mandatory 25% profit retention reduces distributable profits in early years. Once the company has accumulated €25,000 in reserves, it can convert to a GmbH and the retention obligation ceases.
- Early-stage startups and solo founders with limited capital
- Freelancers transitioning to a corporate structure
- Testing a business idea before committing to a full GmbH
- Micro-businesses and small online ventures
Eckdaten
Schritt-für-Schritt-Gründungsprozess
Draft articles of association
Prepare the articles of association. A simplified model protocol (Musterprotokoll) is available for companies with up to three shareholders and one managing director, reducing notary costs.
Notarial certification
As with the GmbH, the formation documents must be notarised. Using the model protocol significantly reduces notary fees.
Open a bank account and deposit share capital
Open a business bank account and deposit the full share capital (as little as €1, though a higher amount is recommended for practical reasons). The entire amount must be paid in cash—contributions in kind are not permitted for a UG.
Register with the commercial register
The notary files the registration with the Handelsregister. The company name must include the suffix "UG (haftungsbeschränkt)" in full—abbreviations are not permitted.
Tax and trade registration
Register with the Finanzamt for tax purposes and obtain a trade licence from the Gewerbeamt, following the same process as a GmbH.
Erforderliche Dokumente
- Articles of association or model protocol (Musterprotokoll)
- Notarised shareholder resolutions
- Proof of full share capital deposit (cash only)
- Passport copies of all shareholders and directors
- Proof of registered office address in Germany
- Managing director appointment and consent
- Tax registration questionnaire
- Trade licence application
Kostenübersicht
Steuerliche Behandlung
Taxed identically to a GmbH: 15% corporate income tax, 5.5% solidarity surcharge, and municipal trade tax, totalling approximately 30%. The mandatory 25% profit retention reduces distributable profits in early years. Once the company has accumulated €25,000 in reserves, it can convert to a GmbH and the retention obligation ceases.
Vor- und Nachteile
- Only €1 minimum share capital—extremely low barrier to entry
- Same limited liability protection as a GmbH
- Can be converted into a full GmbH once €25,000 in capital is accumulated
- Simplified model protocol reduces formation costs
- Suitable for bootstrapped founders and lean startups
- Full access to German double-tax treaty network
- Must retain 25% of annual net profits until €25,000 reserve is built
- Lower perceived credibility compared to a GmbH, especially with larger clients
- Contributions in kind are not allowed—only cash contributions
- The full suffix "UG (haftungsbeschränkt)" must appear on all documents
- Same compliance obligations as a GmbH despite smaller scale
- Banks may be more cautious when opening accounts for a UG
Andere Rechtsformen in Germany
Bereit zur Gründung einer UG (haftungsbeschränkt) in Germany?
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LoslegenThis content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.