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The costs of founding a UG

The formation of a UG consists of several items: Costs for drawing up contracts, notary fees, taxes and official fees. It is the responsibility of the founders to bear these costs. With a precise overview of these costs, you can simplify your UG formation and save costs.

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The checklist for founding a UG

Every successful start-up includes a precise list of all costs, which is essential for the professional liquidation planning of your UG. Here you will find our checklist for founders, which will help you not to lose sight of any cost items.

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Costs for drawing up the UG articles of association and managing director agreement

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Notary fees for notarisation

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Costs for entry in the commercial register

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Costs for business registration

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Tax consultancy fees (registration with the tax office and accounting)

Preparation of the articles of association and management contract

If you are founding a UG with three or fewer shareholders, you can save costs by using a so-called standard record to draw up the articles of association. The standard record is a legally pre-formulated document for your foundation and is the counterpart to individually formulated articles of association. Using a standard record can save you costs. However, you should be aware that it does not always make sense to use a standard record. Here you will find some information on the various contracts:

The standard record

  • Useful for 1-3-person UG-s
  • very simplified document: some information on the rights and obligations of shareholders is missing (the sale or inheritance of shares is not regulated)

The individual charter (400 – 1000 euros)

  • Mandatory for more than 3 shareholders
  • Suitable for more complex UG structures
  • more individual regulations: Rights and obligations of the shareholders are precisely defined

The management contract

  • can be drawn up individually or with a standard record (free of charge)
  • The individual managing director contract is useful for complex UG structures
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Notary fees for notarisation and entry in the commercial register

If you want to set up a UG, it is necessary to notarise this formation and the entry in the commercial register at a notary’s office.

If you set up your company with a standard record, you can expect to pay around EUR 105 for the notarisation for a 1-person UG and up to EUR 165 for 2-3 shareholders. If you have founded your company by means of individual articles of association, you will have to factor in approx. 550 euros for the notary’s fees. However, these fees already include the fees for registration in the commercial register.

Before you register your UG with the registry court, you should make sure that all the documents to be checked are complete and free of errors. If, for example, the registry court rejects the company name of your UG (because it already exists in the commercial register), you will have to go back to the notary. This is associated with additional costs and should be avoided.

The registration court charges a one-off registration fee of EUR 150 when the UG is registered.

Registration with the authorities and tax consultant costs

Most visits to the authorities when setting up your UG are free of charge. Fees are only charged for business registration. The fees vary between 15-60 euros depending on the trade office and its location.

To register with the tax office, you must complete the tax registration questionnaire. There are no costs here. Nevertheless, it is advisable for start-ups in particular to consult a tax advisor if they lack specialist tax knowledge.

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Save costs

Founding a UG can entail some costs. Nevertheless, you can take on many tasks yourself: You can draft some documents yourself, such as the list of shareholders or the shareholder resolution appointing the managing director.

However, caution is advised here: If you try to save too much money here, you may incur additional costs in the start-up process. If the documents do not meet the requirements of the registry court, you will have to make changes, which in turn incur costs. Therefore, leave the drafting of the essential founding documents directly to the notary.

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FAQ

What kind of legal form is the UG (haftungsbeschränkt)?

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The UG (haftungsbeschränkt) is a corporation and, strictly speaking, a GmbH with special characteristics, so it is not actually an independent legal form. It is a corporation with its own name (company), which is represented by a managing director. The UG (haftungsbeschränkt) can be founded by one person alone or by several shareholders. Like the GmbH, the UG (haftungsbeschränkt), as its name suggests, is also limited by liability, although the minimum share capital required to establish it is only 1 euro. In most cases, however, a share capital of around 1,000 euros will be used.

What does UG (haftungsbeschränkt) mean?

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The legal form UG (haftungsbeschränkt) means that the founders are not liable with their private assets if the company gets into financial difficulties. The legal form must be indicated on all business documents, for example in e-mails, letters and invoices as well as in the website imprint. This is required so that other companies and customers can see at a glance that the company's liability is limited. The UG (haftungsbeschränkt) is less highly regarded by banks and investors and in business transactions than other corporations.

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.

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.

Setting up a company and calculating costs correctly. What is the best way to do it?

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The costs for setting up a company vary depending on the legal form and the individual needs of your company. Digitale Gründung offers transparency about costs incurred and helps you to make an accurate calculation to avoid financial surprises.

Why found a UG (haftungsbeschränkt)?

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Founding a UG (haftungsbeschränkt) is particularly suitable for young companies. This is because 1 euro is theoretically enough for the share capital. If you don't want to be liable with your private assets but don't have the start-up capital for another limited company, a UG (haftungsbeschränkt) is a good choice. Unlike a sole proprietorship, liability is limited here and private assets are protected. In practice, however, there are also many arguments against setting up a UG (haftungsbeschränkt), as it often makes more sense to set up a GmbH. Individual advice should be sought here.