Intro

check out the docid\ gucunxir7gv4js4ogalcs power & money corporate law is about how people who want to work together on a business structure their collaboration, with two main issues money who puts in the money, who puts in the sweat, and who gets the money? power how are decisions about the business made? corporate structure userid\ s7u0kshjs e8kpfijgm q \[to be double checked] germany there are many legal forms in germany (e g , civil‑law partnerships like gbr, commercial partnerships like ohg/kg, and corporations) in practice, the key distinction for founders is often between (i) sole proprietorships and (ii) companies (corporations) such as a gmbh/ug (haftungsbeschränkt) or an ag sole proprietorship a sole proprietorship is a business structure in which one individual owns and manages the entire business here are some key points about a sole proprietorship limited access to outside capital bringing in classic “investors” isn’t really possible; you can take loans, but no equity co‑owners without changing legal form liability unlimited personal liability for business debts; your private assets are on the hook taxes profits are taxed on your personal income tax return if you run a trade, trade tax (gewerbesteuer) applies, but natural persons can credit it (up to a cap) against their income tax (§ 35 estg) small e k s can benefit from book‑keeping relief (§ 241a hgb) a sole proprietorship might end up in personal liability keep in mind that a sole proprietorship does not create a legal separation between you and the business this means that you are personally liable for your business if you want limited liability, choose a corporate form (see next section) companies (corporations) the big advantage of incorporating is limited liability shareholders are shielded from company debts (subject to narrow exceptions like wrongful payments after insolvency) when incorporating in germany you’ll typically choose between a gmbh , a ug (haftungsbeschränkt) (a special gmbh variant), or an ag gmbh minimum share capital eur 25,000 (§ 5 gmbhg) ug (haftungsbeschränkt) can be formed from eur 1 (special rules, e g , retention to build capital; § 5a gmbhg) ag minimum capital eur 50,000 (§7 aktg) how german companies are structured structure of a gmbh (company with limited liability) managing directors (geschäftsführer) run the company; appointed by the shareholders shareholders’ meeting (gesellschafterversammlung) the supreme body appoints/removes managing directors, approves key matters, and typically approves the annual financial statements (the management must present the annual accounts to shareholders, § 42a gmbhg) there is no statutory rule that a gmbh must hold an annual meeting on a fixed timetable, but approval of accounts is required by law and the articles supervisory board (aufsichtsrat) not mandatory by default it becomes mandatory if co‑determination applies (e g , > 500 employees one‑third employee representation or under the co‑determination act for larger companies), or if the articles voluntarily create one (§ 52 gmbhg; drittelbg/mitbestg) decision‑making & shareholder protection in a gmbh articles changes usually require a 75% majority and notarization (§ 53 gmbhg) your articles can add stricter requirements transparency gmbhs must keep the shareholder list up to date and file it with the commercial register (§ 40 gmbhg) it is publicly viewable via the unternehmensregister/handelsregister audit & disclosure (gmbh) if the company qualifies as medium or large under § 267 hgb, the annual financial statements must be audited (§ 316 hgb) small companies are exempt the annual accounts and related documents must be filed electronically with the unternehmensregister within the statutory deadline (§ 325 hgb) structure of an ag (stock corporation) management board (vorstand) manages the company independently (§ 76 aktg) supervisory board (aufsichtsrat) appoints/supervises the management board (§ 111 aktg) employee co‑determination can make the board one‑third employee‑elected (> 500 employees; drittelbg) or parity employee‑elected (mitbestg), depending on headcount and legal form general meeting (hauptversammlung) must be held within the first eight months of the financial year (§ 175 aktg) certain decisions require 75% majorities (e g , articles changes, § 179(2) aktg; capital increases, § 182 aktg) buzer audit & disclosure (ag) medium/large ags are audited under § 316 hgb; disclosure to unternehmensregister under § 325 hgb registers & transparency commercial register (handelsregister) central online platforms where incorporation deeds, articles, manager appointments, capital measures, shareholder lists (gmbh), and annual accounts are accessible public search is available transparency register (transparenzregister) all german entities must report their beneficial owners and keep data current (full register since 1 aug 2021) gbr register (gesellschaftsregister , since 2024) gbrs can (and for some transactions must) register; registered gbrs use the suffix egbr (§ 707 bgb; mopeg) real estate deals and similar transactions require registration corporate documents articles of association/statutes articels of association, statutes, and changes are available via the commercial register list of shareholders for a gmbh , the list of shareholders (§ 40 gmbhg) is public and shows holdings annual financial statements annual financial statements must be filed with the federal gazette (bundesanzeiger) and are accessible through the unternehmensregister (deadlines vary by size) shareholders' agreements (sha) confidential between the shareholders; commonly include voting/ pooling arrangements, vesting (good/bad leaver), drag‑along/tag‑along, consent rights, and vetoes these clauses fine‑tune the distribution of power and money beyond what the articles provide switzerland you can choose from a variety of corporate structures when starting a business while other corporate structures are available (associations, cooperatives, general partnerships, etc ), the main distinction in practice is between (i) sole proprietorships and (ii) companies sole proprietorship a sole proprietorship is a business structure in which one individual owns and manages the entire business here are some key points about a sole proprietorship sole ownership the owner is the only person who owns the business there are no shareholders or partners this means that the owner has complete control over all aspects of the business, from business strategy to day to day operations limited access to capital as a sole proprietorship, the ability to raise outside capital is (very) limited in addition, it is not possible to bring in investors liability the owner has full personal liability for debts this means that personal assets can be used to pay business debts taxes profits and losses are reported on the owner's personal income tax return the business itself is not a separate tax entity this can make taxes easier to handle, but it also comes with personal tax obligations a sole proprietorship is not a company keep in mind that while a sole proprietorship legitimizes your business, it does not create a separation between you as an individual and your business this means that you are personally liable for your business on the contrary, if you have a company, you will (usually) not be directly affected personally, even if your business goes bankrupt company the structure of a company involves board of directors the board of directors is the executive branch of the company the board usually elects a chairman and makes decisions by majority vote it has a number of inalienable duties, which are listed https //www fedlex admin ch/eli/cc/27/317 321 377/en#art 716 a for other tasks, in particular the day to day management of the company, the board may delegate its powers to an individual (e g the ceo) general assembly the general assembly consists of all the shareholders of the company and is the supreme body of the company it must meet at least once a year and has a number of inalienable powers, which are listed https //www fedlex admin ch/eli/cc/27/317 321 377/en#art 698 auditor depending on the fulfillment of applicable requirements, companies must appoint an external auditor to perform an ordinary (see https //www fedlex admin ch/eli/cc/27/317 321 377/en#part 3/tit 26/chap 2/lvl c/lvl i/lvl 1 ) or a limited audit (see https //www fedlex admin ch/eli/cc/27/317 321 377/en#art 727 a ) companies with less than 10 employees can even waive the limited audit requirement with the consent of all shareholders as mentioned above, the great advantage of companies is that they limit the personal liability of the founders by creating a distinction between individuals and entities when incorporating a company, you can choose between a gmbh/sàrl or an ag/sa check out our docid\ kkoymjmu ike8hcmpm1vn page for more details corporate documents articles of association articles of association are highly standardized they are publicly available for all companies on the commercial register's website they outline the basics such as (i) how many shares are available, (ii) how these shares are issued and transferred, (iii) what the general assembly can decide, etc shareholders' agreements the docid\ klevxtla0hb4w mlgdyag is a confidential agreement between all shareholders it governs the details of the company's organization other corporate documents other documents related to the docid\ kkoymjmu ike8hcmpm1vn or, for example, the docid\ d6twtaykbvxzvtixlkaee carried out by the companies, are publicly available on the website of the commercial register their purpose is to formalize the decisions taken by the company that are visible in the commercial register (e g , change of seat, capital increase, etc )