Limited company

a limited company (short: GmbH) is a legal entity of private law, in whom other legal or natural persons with a cash investment take part. As a legal entity the GmbH has independent rights andObligations: she can be locked property be acquired, contracts and complained and sued before court. In addition the GmbH is responsible to the creditors for commitments in relation to only with the own fortune the society and not with (private) the fortune of the partners. Other abbreviations thatCompany form are among other things GesmbH (in Austria), ltd. (in connection with that written out word society like e.g. in XYZ development company ltd.) or gGmbH (non-profit limited company).

Table of contents 1 GmbH in Germany 1,1 legal bases 1,2 establishment of oneGmbH 1,3 management and agency 1,4 supervisory board (supervising organ) 1,5 whole of the partners/company meeting 1,6 accounting of the GmbH of 1,7 rights and obligations of the partners 1,8 taxation 1.8.1 body-expensively 1.8.2 capital return-expensively 1.8.3 trade tax 1.8.4 value added taxes 1.8.5 wage tax 1,9 dissolution of the GmbH 1.10 Historical development 1,11 characteristics 1,12 current developments 2 GesmbH in Austria 2,1 legal bases 3 GmbH in Switzerland 3,1 legal bases 4 GmbH in Liechtenstein 4,1 legal bases 5 see also

GmbH in Germany

(legal status: June 2005)

Is considered

to legal bases the GmbH as a commercial company in the sense of the commercial code. The special legal bases of a GmbH are in the law concerning the limited companies (GmbHG).

establishment of a GmbH

a natural person or onelegal entity or several natural and/or legal entities specify the statute of the future GmbH in notarially recorded articles of association (model contract). The abbreviation GmbH i.G. “limited company in establishment” is called. The additive i.G. refers to it,that the society is still in the establishment phase as preGmbH. In this phase the society is already part legally responsible, can be registered thus for example as an owner into the land register. However the partners before the entry cling in the trade register, if herin the name of the GmbH, unrestrictedly, directly and solidary, § GmbHG act 11 II. It is not necessary that one possesses natural person taken part the German nationality at the establishment of GmbH. The statute must contains

• the company of the GmbH
  the company thatGmbH must contain the designation “limited company” or a generally understandable abbreviation of this designation, e.g. “GmbH”.
• the seat of the GmbH
  seat of the society is the place, which the articles of association determine.
• the the subject of the enterprise
  a GmbH knows foreach legally permissible purpose to be established.
• the height of the capital stock
  the minimum capital stock amounts to at present 25,000 euro, the investment of each partner must at least 100 euro amount to, see. GmbHG §5 (1). (In addition, see section current developments).
• the amount of the investments
  The amount of the investment can be intended for each individual partner differently; it must be in euro remainder-free by 50 divisible (at the company meeting one receives a voice € per 50 insert). The total amount of the investments must with the capital stockagree.

The GmbH must by all partners with the registry office (district court), in whose district the GmbH their seat has, for entry into the trade register (department of B) to be announced. The registration may be made only if at least one quarterthe investment and at least one amount at height of half of the minimum capital stock is deposited. If only one partner is present, the minimum capital stock in full height must be installation-paid (thus the amount of minimum deposit at capital stock of 12.500, altogether necessary for a GmbH€ during entry in the HR)

management and agency

the GmbH must have one or more managing directors (§ 6 I GmbHG). Managing directors know only natural, unrestrictedly competent persons its (§ 6 II 1 GmbHG). The managing directors lead thoseBusiness of the GmbH after the instructions of the company meeting and in the context of law and statute (§ 37 I GmbHG). The managing directors represent the GmbH judicially and opposite out of court third (§ 35 I GmbHG). The right of representation of the managing directors is third oppositeunrestrictedly and illimitably (§ 37 II 1 GmbHG). The managing directors have the care of a tidy businessman in affairs of the GmbH to use (§ 43 I GmbHG).Insichgeschäfte are permissible only if they are expressly permitted in the articles of association or by partner resolution (§181 BGB)….

supervisory board (supervising organ)

in the statute of the GmbH can be planned a supervisory board. A supervisory board must be formed, if the GmbH employs more than 500 employees. Its task predominantly exists in the monitoring of the management.

whole of the partners/company meeting

highest (terminal) organ of the GmbH is the whole of the partners (company meeting). Their competence extends - so far law or statute something else does not determine - to all affairs of the GmbH (§ 45GmbHG). The partners seize their resolutions in the company meeting (§ 48 I GmbHG); with agreement of all partners written tuning is permissible (§ 48 II GmbHG).

in principle the regulations

of the commercial code apply for accounting of the GmbH for the GmbHover record keeping (§§ 238 to 263 HGB) as well as supplementing §§ the 264 to 335 HGB for finance companies.

an obligation has rights and

obligations of the partners each partner for the achievement of a portion of the capital stock in the articles of association taken over (investment - § 3 I Nr.4 GmbHG). The third-party liability of a partner consists of fulfilling its investment obligation (§ 19 I GmbHG). A business share can be sold; an appropriate contract must be notarially recorded (§ 15 III GmbHG). ThosePartners have requirement on the yearly surplus, as far as she does not permissible-prove is excluded from the participation (§ 29 I GmbHG). Each partner can require of the managing directors that they give him information immediately over the affairs of the GmbH and it insightinto the books permit (§ 51a I GmbHG). A partner can be excluded by judicial judgement from the society, if an important reason lying in its person makes the continuation of the society with him unreasonable.

taxation

body-expensively

a GmbH are as finance company and a legal entity their own tax subject. It is subject to that with its income body-expensively. Present control item 25%. GmbHs can be tax-exempt however also as “non-profit GmbH” (“gGmbH”) with an appropriate object of the company.

capital return-expensively

the GmbH pours profit to its partners out (dividend), must it of it capital return-expensively retain (control item at present 20%) and to the tax office to exhaust. The further tax treatment of the dividend and the retained capital return-expensively with the partnerit depends on the fact whether the partner a natural or legal entity with domicile and/or. Seat abroad in or is.

Trade tax

the activity of a GmbH is assigned in principle to the commercial range; it is subject therefore to the trade tax.

value added taxes

a GmbH is Unternehmerin in the sense of the value added tax right.

wage tax

employs the GmbH employee, has it the wage-fiscal obligations of an employer to fulfill. That applies also in relation to the partner - managing directors, of themPurchases as a rule the income from not-independent work (employee) to be assigned. The managing director salaries for the partners are deductible as operating expenditure.

dissolution of the GmbH

a GmbH becomes among other things dissolved

• by expiration of the time determined in the articles of association
• by resolution of the partners
• by judicial judgement
• by opening of the insolvency procedure
• with validity in law of the resolution, by which the opening of an insolvency procedure was rejected for lack of mass.

The dissolution of the society must be announced for entry in the trade register. The managing directors are the “born” liquidators, if nothing else is certain. In the opened insolvency procedure the liquidation of the GmbH does not take place via the managing directors. If the insolvency procedure is rejected for lack of mass, then the managing directors are the liquidators, if nothing else is certain.

Historical development

GmbHs for the first time 20 became by to. April 1892 issued GmbH law makes possible. After the creation of this company form in Germany the concept in the whole world spread. First in Austria 1906, then in Portugal 1917, Brazil 1919, Slowakei 1920, Chile 1923, France 1925, Belgium 1935 and further countries comparable possibilities were created.

characteristics

• GmbH & cost. Kg
• GmbH & cost. OHG
• GmbH & quiet
• covers distribution of profits
• partner outside financing
• managing director adhesion

current developments

the Federal Cabinet had at the 1. June 2005 the draft of a law for the reorganization of the minimum capital of the GmbH (MindestkapG) decided. The draft looked up forwards, the minimum capital stock of the limited companies from at present 25,000 € to lower € 10.000. The law should to the 1. Into force step January 2006; it could not do however due to the premature dissolution of Bundestag any more in the 15. Legislative period to be discharged. To 23. September 2005 has the Upper House of Parliament the so-called MindestkapG,BR-Dr 619/05, rejected. In practice the bill was anyway as completely insufficient reaction to the shrinking competitive power of the legal form of the GmbH (particularly opposite increases used foreign company forms (so-called from German entrepreneurs. “Mail box companies “)) rated.

ForApril 2006 is now the collecting main of a discussion draft of the Federal Department of Justice for a comprehensive reform of the GmbH law planned. After hearing the reform draft becomes the problem fields minimum capital, own capital funds spare right, cash Pooling, managing director adhesion, “firm funerals” and probably the acquisition in good faith of GmbH portionsand the way course by GmbHs abroad European take up and regulate again.

GesmbH in Austria

the capital stock of a GesmbH must amount to at least 35,000 euro and at least be installation-paid with the establishment to the half. The minimum height of a business share70 euro amount to. The partners must have carried out at least in each case one quarter of their investment, so that a GmbH can be registered into the firm book. For the establishment of a GesmbH at least one partner must be present. Up to the entry into the trade register must the society the firm additive “in establishment” (or shortened: “i. G. “) lead.

A supervisory board must be formed, if

• the capital stock exceeds 70,000 euro and more than 50 partners are involved or
• the number of the employees exceeds 300.

The supervisory board becomes ofthe general assembly (consists of all partners) selected. For two selected supervisory boards each additionally a workers' delegate is to be accepted additionally to the supervisory board.

legal bases

• law of 6. March 1906, over limited companies (GmbH law - GmbHG), last changedby the Federal law BGBl. I No. 59/2005.

GmbH in Switzerland

the capital stock of a GmbH must amount to at least CHF 20,000 and at the most CHF 2 million. The capital must be deposited up to the half at least. For that notinstallation-paid capital cling the partners solidary. Swiss GmbH is for smaller enterprises meant. The minimum height of a share amounts to CHF 1.000. A GmbH needs 2 partners with the establishment. The GmbH is always registered in the trade register. There is a supervisory boardnot.

legal bases

• obligation right (article 772 to 827)

GmbH in Liechtenstein

capital stock are here CHF 30,000 or the appropriate equivalent in another currency or a Sacheinlage. Maximally 30 partners are permissible without grant. Organsthe GmbH are the company meeting as the highest organ that annually at least once must meet, that or the managing directors as well as the board of control (revision place), which the end-of-year procedure examined and which is company meeting report requiring.

legal bases

• of Liechtenstein person and corporate law (PGR)of 20. January 1926, LGBl 1926 No. 4

see also

• to Limited company (English)
• Sociedad de responsabilidad limitada (Spanish)
• Besloten vennootschap (Netherlands)
• corporation (German)
• finance company
• legal form
• abandonment right, the right of a partner to make his portion available,in order to escape an additional payment.