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When does it make sense to set up a UG?

The UG offers the advantage of limited liability, especially for those who want to set up with a small share capital. This means that in the event of liability, the shareholders are not liable with their private assets, but only the company up to the amount of the share capital.

Nevertheless, the UG brings with it some administrative challenges, including bookkeeping obligations and annual financial statements, which take up a lot of time. In contrast, registering a UG is comparatively simple!

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Founding a UG in 6 steps

As the UG is legally closely linked to the GmbH, the formation steps are also very similar. The foundation can be summarised in these steps:

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Create UG articles of association/standard record

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Have the contract notarised

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Open a UG business account and pay in share capital

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Registration of the UG in the commercial register

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Business registration and entry in the transparency register

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Register UG with the tax office and apply for a tax number

Drawing up articles of association and notarisation

Before you can register your UG, you must first draw up articles of association. The contract can be drawn up using either a standard record or individual articles of association. The standard record can only be used if the UG has no more than three shareholders and only one managing director.

The information in the articles of association must be complete and correct. If errors are detected when checking the UG registration in the commercial register, the notary process has to be repeated, which causes double costs and prolongs the formation process. To avoid mistakes, it is advisable to consult a lawyer. The lawyers at Digitale Gründung will be happy to support you in drawing up the articles of association.

The articles of association must also be notarised and all shareholders must be present.

The articles of association must contain the following minimum information:

  • Company name (the company suffix “Unternehmergesellschaft (haftungsbeschränkt)” is mandatory)
  • Company location
  • Object of the company
  • Share capital
  • Profit distribution
  • Managing directors authorised to represent the company
  • Other UG shareholders and their shares
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Open a business account

In order to deposit the share capital, a business account must be opened when the UG is founded. The articles of association must be submitted when the account is opened. The UG is still in the formation stage prior to entry in the commercial register and bears the addition “UG in Gründung (UG i. G.)”. To avoid problems when opening an account, it is advisable to open a founder account first.

The Digitale Gründung team will be happy to support you in opening an account and registering your UG so that you can take care of your company quickly and easily.

You need the following data to open a business account:

  • Certificate of incorporation with notarial seal
  • List of shareholders
  • Identity cards of the legal representatives

Entry of the UG in the commercial register

Before you can register your UG with the commercial register, the share capital of the UG must be paid into the business account. You must therefore submit a bank statement from the business account and the payment receipt for registration. The UG is entered in the commercial register in section B. The application for registration is made with the help of a notary, who then forwards the application to the local court.

After examination by the local court, the commercial register entry is published in the electronic Bundesanzeiger. A fee is charged by the local court for registration and notary fees must be paid.

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Business registration and applying for a tax number

Any self-employed activity that is carried out over a longer period of time with its own financial risk and with the aim of generating profits must be registered with the trade office. You can register your business online, via the portal of your city’s trade and public order office or make an appointment on site.

The trade office informs the tax office about the new company so that you receive a tax number and a VAT ID for your UG. You can save time by completing the tax registration questionnaire and informing the tax office yourself.

In addition, depending on the type of business, you may have to inform other authorities, for example

  • Your responsible employers’ liability insurance association
  • the Chamber of Industry and Commerce (IHK)
  • the Chamber of Crafts (HWK)
  • Applying for a company number when hiring employees

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FAQ

How do I set up a UG (haftungsbeschränkt)?

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A UG (haftungsbeschränkt) is founded just as quickly as a GmbH. Once a company name has been found, the articles of association can be concluded and notarised. The UG (haftungsbeschränkt) can be founded by one entrepreneur alone or by two or more shareholders. A business account is then opened and at least EUR 1 of share capital is paid in. The notary then registers the UG (haftungsbeschränkt) with the payment receipt for entry in the commercial register court. In addition to the business registration, the tax registration at the tax office is also carried out before the UG (haftungsbeschränkt) can start its business activities.

What does it cost to set up a UG (haftungsbeschränkt)?

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The formation of a UG (haftungsbeschränkt) is not less expensive than other legal forms. Notary fees and costs for business registration and entry in the commercial register are generally not cheaper than founding a GmbH. However, you can found a company with significantly less share capital. This can theoretically be as little as 1 euro. A UG (haftungsbeschränkt) can be founded with a capital of just 1,000 euros. If it is a one-man UG (haftungsbeschränkt), you can use the so-called model protocol for the formation and save on notary fees again.

What is the difference between a GmbH and a UG (haftungsbeschränkt)?

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The biggest difference between a UG (haftungsbeschränkt) and a GmbH is the amount of share capital required to set up the company. A GmbH requires 25,000 euros in share capital, half of which must be paid in when the company is founded. In the case of the UG (haftungsbeschränkt), on the other hand, EUR 1 is sufficient as share capital, provided the capital requirement does not necessitate a higher sum. In the case of a UG (haftungsbeschränkt), reserves must be formed from profits which may not be distributed to the shareholders. In addition, the UG (haftungsbeschränkt) can also consider increasing its capital and changing its name to a GmbH. Otherwise, the UG (haftungsbeschränkt) has the same rights and obligations as a GmbH in terms of shareholder, accounting and liability requirements. The UG (haftungsbeschränkt) must also pay corporation tax and trade tax in the same way as the GmbH.