Introduction to Corporate Groups Firmengruendung.de / Friday, February 29, 2008 0 3853 Building a corporate group (English: Group) means distributing business risks and/or profit centers across various (subsidiary) companies. It also allows for a clear separation of business units. One of the classic models is certainly the division of the company into holding and operating companies. In addition to the marketing benefits of a corporate group, this setup can reduce risks, increase discretion, and optimally manage market appearances. It is no coincidence that larger companies have always utilized the possibilities of forming groups or holdings. However, for small businesses, the formation of a corporate group with German companies, while highly recommended on a case-by-case basis, has often been too cumbersome. Here, the UG (or possibly the Limited) can play to its strengths: For manageable incorporation costs, almost any conceivable configuration can be quickly and cost-effectively established. Read more
Introduction Ltd & Co KG Firmengruendung.de / Friday, February 29, 2008 0 4423 A KG (Kommanditgesellschaft) is a type of partnership in Germany where at least one partner (the general partner) is fully liable with their personal assets, while at least one other partner (the limited partner) is liable only up to the amount of their capital contribution. It is common practice to appoint a corporation as the general partner. This could be a GmbH, AG, or even a Limited company. This arrangement prevents the entrepreneurs' private assets from being liable. At the same time, the advantages of a partnership are preserved (more on this below). By using a Limited company as the fully liable general partner, the required minimum capital contribution for a new project can also be significantly limited. An entrepreneur can offset their profits from a Kommanditgesellschaft, for example, with losses from other business activities (such as from another Ltd. & Co KG or from rental and leasing).... read more Read more
Basics of the LTD Structure Firmengruendung.de / Friday, February 29, 2008 0 8418 The structure of a Limited company is similar to a mix between a German GmbH and a small public company. The capital stock is divided into shares among the shareholders. These shareholders own the company. Shares can be issued, sold, or transferred at any time. The company's business is managed by the Director. Naturally, more than one director can be appointed. Important tasks of the Director: The Director is responsible for managing the company's affairs and for the timely submission of the following documents: Accounting (Accounts) Tax declaration Annual report (Annual Return) Financial statements and balance sheet Important tasks of the Company Secretary: Maintenance of corporate registers Invitations to general and shareholder meetings Read more
Advantages of the LTD Firmengruendung.de / Friday, February 29, 2008 0 3954 Exclusion of personal liability Minimum liability capital of €1,500 instead of €25,000 as in a GmbH Significantly lower other formation costs than a GmbH (no notary required) Operational within a few days Simple and cost-effective design of corporate groups and holding structures World's most renowned corporate form Free choice of name as in a GmbH Simple restructuring and dissolution Easy capital raising through the issuance of shares and the perpetual possibility of capital increase Read more
Freedom of Establishment in the EU as the Basis for LTD in Germany Firmengruendung.de / Friday, February 29, 2008 0 4030 One of the fundamental ideas of the European Union is the freedom of movement for its citizens. Thus, a German can live and work under facilitated conditions in France, Spain, or the UK just as an Italian, Portuguese, or Greek can. However, this freedom of movement extends not only to natural persons (i.e., individuals) but also to legal entities (e.g., corporations). This is upheld by the European Court of Justice, and since the confirming decision on March 13, 2003, also by the German Federal Court of Justice (BGH). This means that a German GmbH can operate freely in any member state without losing its legal capacity. Naturally, corporations from other EU countries enjoy the same protection in Germany. Therefore, German entrepreneurs have the opportunity to operate in Germany with a properly established corporation from another EU neighboring country. Read more