Establishing a UG haftungsbeschränkt (limited liability)

The UG haftungsbeschränkt (limited liability) is not a separate company but a form of a GmbH. The difference is that the minimum share capital is not € 25,000, but only € 1. The UG company has the advantage that liability is limited but a small share capital has to be raised.

What are the advantages of a UG haftungsbeschränkt?

Establishing a UG haftungsbeschränkt (limited liability) has the following advantages:

• No liability of the partners for company debts
• Low share capital
• Quick establishment and entry in the commercial register
• Low start-up costs.

It is also possible to set up a UG haftungsbeschränkt (limited liability) first and then start doing business. If the need then arises to add more shareholders or to increase the size of the business, a capital increase to at least € 25,000 can be carried out. In this case, the UG haftungsbeschränkt (limited liability) automatically becomes a GmbH.

A disadvantage of a UG haftungsbeschränkt (limited liability) is that a quarter of the annual profit has to be covered. The reserve has the goal of reaching the share capital of € 25,000. In the event that a total of € 25,000 has been deposited as share capital or this has been achieved in combination with the reserve, the UG haftungsbeschränkt (limited liability) automatically becomes a GmbH.

What is the disadvantage of the UG haftungsbeschränkt?

When founding, there is a risk that the UG haftungsbeschränkt (limited liability) is over-indebted at the start of the foundation. This is the case if the share capital is too small and the start-up costs are higher than the share capital. In this case, there is a compelling reason for insolvency. A lawyer specializing in company law can rule out the risk of insolvency when carrying out the establishment and drafting of the articles of association and take legally certain precautions.

For tax purposes, the UG haftungsbeschränkt (limited liability) has the obligation to pay corporate tax. The tax rate is 15%. In addition, the tax of Solidaritätszuschlag (solidarity surcharge) of 5.5%of corporate income tax must be paid. In addition, trade tax is payable, since the UG haftungsbeschränkt (limited liability) is a merchant form in the sense of commercial law and therefore operates a trade.

When founding a new company, we can offer you the establishment of an UG haftungsbeschränkt (limited liability) at a fixed price on the following terms: