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This article and this website is for informational purposes only and does not constitute legal advice. This information provided should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter and not rely on the content of this article. Nothing on this site is intended to create an attorney-client relationship and nothing posted constitutes legal advice. We cannot guarantee that the information is accurate, complete or up-to-date. 

News 2016:

08/2016: Austria Appoints Orlando resident As Honorary Vice Consul
The Republic of Austria recently appointed German American attorney Carl Christian Thier as Honorary Vice Consul for its Orlando Consulate, to work jointly with Honorary Consul, Toby Unwin. Mr. Thier is a member of the German Bar, the New York Bar and the Bar of Great Britain ("SRA") and is fluent in both German and English.
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Doing Business in Germany: Formation of a corporate entity named “GmbH” by a US person or entity.

A German GmbH can be set up by one or more individuals or entities, usually without restrictions. It is an excellent vehicle to gain access to a thriving market, giving the US investor a local presence in Germany and the European Union. Urban Thier & Federer represents clients from all over the United States with regards to the initial formation of a German entity, followed by ongoing advice with regards to legal issues in Germany and the European Union, such as contracts, Intellectual Property matters and any other business law related advice the client may request.

1. Entity
The GmbH is a German limited liability company. It is comparable to the United States “C-Corporation”. It is not a partnership or a hybrid entity, such as the United States “LLC”.

The GmbH is a very structured entity form which is at the same time flexible to adjust to the needs of a US investor. Its Articles of Incorporation (“Satzung”) allow a wide range of regulations to enable an investor to exercise control over management and prevent undesired share transfers. The GmbH is usually a vehicle for smaller to mid-sized businesses; large companies use the “Aktiengesellschaft“, the “AG”, which is a corporation suited for larger and for public companies.

A minimum amount of EUR 25,000 is required as equity contribution to the GmbH. The amount of equity paid and the names of the different shareholders are entered into the public register. A supervisory board is not required by law in Germany; however, such a board can be established if the shareholders decide to do so or by regulation in the articles of the GmbH. The formation of the GmbH and all and any sale and transfer of shares has to be performed in front of a German Notar. The German Notar is a specifically qualified lawyer, appointed by the court, to act as a quasi-judicial entity to ensure the accuracy of important transaction, such as the formation of a GmbH or the transfer and sale of shares in a German GmbH. His role and education requirements are every different from a US notary public.

The liabilities of the shareholders of the GmbH towards third parties are limited to the amount of the signed share capital of the company. Once a shareholder has paid his or her equity contribution in full, there is no more individual liability on the part of the shareholder. It Is permitted to make in-kind contributions instead of cash contributions.

The location of the actual registered office of the GmbH has to be within Germany. It is possible to open one or more office locations for the GmbH outside of Germany, in example at the location of a foreign shareholder of the GmbH.

After the GmbH was set up in front of the German Notar, the formation proceedings are not completed unless the required equity amount has been paid in and the registration with the German public register has been submitted by the Notar. In the interim, the entity can already act and contract, but has to add the affix “i.G.” to its name, indicating that it is a GmbH in the process of formation. If the formation is not eventually completed, the managers and the shareholders may be held liable for obligations entered into by the GmbH i.G.

2. Shareholders
The shareholders of a GmbH have substantial powers. The majority of shareholders can, through a resolution made at a shareholder meeting, direct the managers to follow its instructions. Votes are usually counted in accordance with the percentage of shares owned (“Geschaeftsanteil”).

The shareholders have the right to approve the annual financial statements. They determine how the company profits are used and appoint and dismiss the managers. In essence, they are entitled to direct the business through the executing managers.

3. Management
The GmbH can have one or more managers, called “Geschaeftsfuehrer”. The manager has to be an individual person; legal entities are not permitted as manager. Such manager can live in Germany or abroad, he/she does not necessarily have to be a German resident or citizen. However, there is a substantial number of obligations of a manager of a GmbH, in particular related to incidences where the GmbH is low on liquidity. Due to the complexity of these legal obligations, it is very much recommended to any US investor who wishes to operate through a GmbH in Germany to appoint an experienced GmbH Geschaeftsfuehrer as manager. The US investor should also work with and through specialized local legal advisors such as Urban Thier & Federer, P.A.

Carl Christian Thier, LL.M.
Attorney at Law 
 

Information:

This article and this website is for informational purposes only and does not constitute legal advice. This information provided should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter and not rely on the content of this article. Nothing on this site is intended to create an attorney-client relationship and nothing posted constitutes legal advice. We cannot guarantee that the information is accurate, complete or up-to-date. 

News 2016:

08/2016: Austria Appoints Orlando resident As Honorary Vice Consul
The Republic of Austria recently appointed German American attorney Carl Christian Thier as Honorary Vice Consul for its Orlando Consulate, to work jointly with Honorary Consul, Toby Unwin. Mr. Thier is a member of the German Bar, the New York Bar and the Bar of Great Britain ("SRA") and is fluent in both German and English.
Read More...

CONTACT US:

* = required field(s):

By submitting this form I agree to the Terms of Use

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