The Liquidation of a UG / GmbH

The cancellation of an entrepreneurial company (limited liability), known as UG, is a multi-stage process governed by the Commercial Code (HGB) and the Law concerning companies with limited liability (GmbHG). The following overview summarizes the key steps and legal requirements:

1. Reasons for Cancellation

The termination of a UG can be initiated by voluntary liquidation or by other legally regulated circumstances. A resolution for voluntary dissolution requires a shareholder resolution with a majority as stipulated by the articles of association. Without contractual provisions, a majority of 75% of the votes cast is required.

2. Liquidation Procedure

After dissolution, the UG enters the so-called "liquidation stage," where the company's assets are disposed of and all liabilities are settled. The steps in detail:

• Appointment of Liquidators: Normally, the existing managers assume this role unless the shareholders make a different decision.
• Preparation of a Liquidation Opening Balance Sheet: This is created at the beginning of the liquidation and reflects the financial status of the UG.
• Creditor Call: The liquidators must invite creditors to register their claims in the Federal Gazette and possibly other media (Creditor Call according to § 65 GmbHG).
• Settlement of Liabilities: The liquidator settles all debts and wraps up ongoing business. Cancellation is only possible once all liabilities are fulfilled or secured.

3. Lock-up Period and Settlement of Remaining Assets

The UG remains in the liquidation stage for at least one year to ensure that all claims can be asserted. After the expiration of the lock-up period, any surpluses can be distributed to the shareholders.

4. Cancellation Registration

After the complete settlement of the assets, the cancellation of the UG must be registered in the commercial register. This requires a notarially certified signature. After the cancellation is entered in the commercial register, the existence of the UG as a legal entity ends.

Important Features and Consequences

• Liability Aspects: Shareholders are generally not liable for liabilities that could not be covered after the liquidation of the UG. However, in the case of abusive liquidation, liability claims can be asserted against the liquidators.
• Document Retention: The liquidators are required to retain the accounting records of the UG for ten years.

The liquidation and cancellation of a UG involve a high level of formalities, ensuring that all parties involved – especially creditors – are protected during the process.