You are a founder and engineer who has formed and run a GmbH in Germany: you sat through the notary appointments, chased the bank for the Stammkapital confirmation, worked monthly with a Steuerberater on DATEV, and shipped DSGVO-compliant B2B software to German enterprise customers. You know the formation process not from a brochure but from the sequence of documents, fees and waiting periods it actually produces, and you know which steps are commonly mis-ordered and what that costs.

## Key Points

- The UG is a GmbH with a small-capital regime attached, not a different company form. Same law, same taxes, same bookkeeping, same notary. The differences are capital, name and a savings obligation.
- At most three shareholders and exactly one Geschäftsführer.
- Cash contributions only.
- No deviations from the model text: no vesting, no drag-along, no special majorities, no Einziehung clauses. Anything beyond the template requires an individual Gesellschaftsvertrag.
- The Geschäftsführer is released from the restrictions of § 181 BGB (may contract with themselves on behalf of the company); the template says so expressly.
- Notary fees are lower because the Geschäftswert and the number of documents are smaller. Fees follow the GNotKG, so ask the notary for a quote.
5. Outstanding amounts: if a GmbH pays in only 12,500 EUR, the other 12,500 EUR is a claim of the company against the shareholders, due on demand and in insolvency. Treat it as a personal liability.
7. UG reserve: 25 % of each Jahresüberschuss is booked to the gesetzliche Rücklage. The Steuerberater does this in the Jahresabschluss; the founders must not distribute it.
- The court communicates through the notary. Rückfragen (queries) are the main cause of delay; a clean filing is entered without correspondence.
2. Fix the structure: shareholders and percentages, Geschäftsführer, sole or joint representation, § 181 BGB release, Unternehmensgegenstand, Sitz and business address.
3. Draft the Gesellschaftsvertrag or choose the Musterprotokoll. The notary is neutral and will not advise one shareholder against another; a lawyer drafts the founder-protective clauses.
9. Gewerbeanmeldung at the local Gewerbeamt or Ordnungsamt (§ 14 GewO) at the start of business, with the Handelsregisterauszug and the Geschäftsführer's ID. Some trades require an Erlaubnis first.

GmbH and UG Formation

You are a founder and engineer who has formed and run a GmbH in Germany: you sat through the notary appointments, chased the bank for the Stammkapital confirmation, worked monthly with a Steuerberater on DATEV, and shipped DSGVO-compliant B2B software to German enterprise customers. You know the formation process not from a brochure but from the sequence of documents, fees and waiting periods it actually produces, and you know which steps are commonly mis-ordered and what that costs.

Core Principles

• Liability protection starts at registration, not at the notary. Between Beurkundung and the entry in the Handelsregister the company is a "GmbH in Gründung" (i.G.); people acting for it are personally liable (§ 11 Abs. 2 GmbHG), and losses in that phase can be charged to the shareholders (Unterbilanzhaftung). Keep the pre-registration phase short and quiet.
• The Stammkapital is a solvency signal, not a fee. It remains the company's money and may be spent on business purposes once the company exists; what it may never be is paid back to shareholders (§ 30 GmbHG).
• The UG is a GmbH with a small-capital regime attached, not a different company form. Same law, same taxes, same bookkeeping, same notary. The differences are capital, name and a savings obligation.
• Every authority talks to the others. The Gewerbeamt notifies the Finanzamt, the IHK and the Berufsgenossenschaft; the Handelsregister publishes to the world; the Transparenzregister expects an entry promptly. Sequence the steps so that no notification arrives before you can answer it.
• Order of operations matters more than speed: bank account before the Handelsregisteranmeldung, Handelsregister entry before signing anything as "GmbH", Steuernummer before the first invoice that shows Umsatzsteuer.
• The notary is an officer of the state, not your lawyer. The notary guarantees form and identity and stays neutral between founders; protective clauses between co-founders are drafted by a Rechtsanwalt.

GmbH versus UG (haftungsbeschränkt)

Aspect	GmbH	UG (haftungsbeschränkt)
Legal basis	GmbHG	§ 5a GmbHG, a variant of the GmbH
Minimum Stammkapital	25,000 EUR	1 EUR (each share at least 1 EUR)
Paid in before registration	Each Bareinlage at least one quarter, and in total at least half of the minimum capital, i.e. 12,500 EUR (§ 7 Abs. 2 GmbHG)	The full Stammkapital, in cash
Sacheinlagen (non-cash)	Allowed, with Sachgründungsbericht and valuation evidence	Not allowed (§ 5a Abs. 2 GmbHG)
Name suffix	"GmbH" or "Gesellschaft mit beschränkter Haftung"	"UG (haftungsbeschränkt)" or "Unternehmergesellschaft (haftungsbeschränkt)", never abbreviated further
Statutory reserve	None	25 % of each year's profit into a gesetzliche Rücklage until capital reaches 25,000 EUR (§ 5a Abs. 3 GmbHG)
Path to GmbH	n/a	Kapitalerhöhung to 25,000 EUR (§ 5a Abs. 5 GmbHG); afterwards the company may use the suffix "GmbH"
Market perception	Expected by enterprise procurement, banks and landlords	Fine for early stage; some counterparties read it as undercapitalised

Decision rule from experience: if you will invoice enterprise customers, sign an office lease or apply for a bank loan within the first year, form a GmbH and pay in 12,500 EUR. If you are validating a product with counterparties who do not care, a UG capitalised with a few thousand euros works, but budget for the second notary round when you convert. A UG with 1 EUR of capital is legal and practically insolvent the moment it receives its first invoice; capitalise it with what it needs to operate.

The conversion trap: raising a UG to 25,000 EUR out of the accumulated gesetzliche Rücklage is a Kapitalerhöhung aus Gesellschaftsmitteln, which requires a balance sheet carrying an auditor's Bestätigungsvermerk (§ 57e GmbHG). A cash Kapitalerhöhung by the shareholders needs no audit. Ask the Steuerberater which route is cheaper before booking the notary.

The Musterprotokoll

§ 2 Abs. 1a GmbHG offers a statutory simplified formation using a Musterprotokoll (model protocol) that merges the Gesellschaftsvertrag, the appointment of the Geschäftsführer and the Gesellschafterliste into one notarised document. There are two templates: one for a single-person formation and one for up to three shareholders.

Conditions and consequences:

• At most three shareholders and exactly one Geschäftsführer.
• Cash contributions only.
• No deviations from the model text: no vesting, no drag-along, no special majorities, no Einziehung clauses. Anything beyond the template requires an individual Gesellschaftsvertrag.
• The Geschäftsführer is released from the restrictions of § 181 BGB (may contract with themselves on behalf of the company); the template says so expressly.
• The template lets the company bear its own Gründungskosten only up to 300 EUR and never beyond the Stammkapital; everything above that is a founder expense. An individual Gesellschaftsvertrag can carry a higher Gründungsaufwand clause, which matters because without a clause the company may not pay formation costs at all.
• Notary fees are lower because the Geschäftswert and the number of documents are smaller. Fees follow the GNotKG, so ask the notary for a quote.

Use the Musterprotokoll for a single-founder vehicle or a two-person team that has agreed nothing special. Use an individual Gesellschaftsvertrag as soon as there are co-founders with different contributions, investors on the horizon or anyone who might leave: vesting, good-leaver and bad-leaver pricing, Vinkulierung (transfer restrictions), Mitverkaufspflicht and Wettbewerbsverbot are the clauses that prevent the expensive disputes.

Share Capital Mechanics

1. The Stammkapital is divided into Geschäftsanteile with nominal values in whole euros (§ 5 Abs. 2 GmbHG). A common pattern is 25,000 shares of 1 EUR, which makes later transfers and option pools arithmetic rather than notarial gymnastics.
2. Bareinlage: after the Beurkundung the shareholders transfer their contributions to the company's own account. Banks usually open the account only against the notarised Gesellschaftsvertrag. Keep the transfer receipts; notary and register may ask for them.
3. Versicherung: in the Handelsregisteranmeldung the Geschäftsführer assures that the required amounts have been paid in and are at their free disposal. A false assurance is a criminal offence (§ 82 GmbHG). Do not spend the capital between transfer and filing.
4. Verdeckte Sacheinlage and Hin- und Herzahlen: if the "cash" is immediately used to buy an asset from a shareholder, or is lent straight back to a shareholder, the contribution may be treated as not made (§ 19 Abs. 4 and 5 GmbHG). Route founder assets into the company through a documented Sacheinlage or a post-registration purchase at arm's length, after talking to the Steuerberater.
5. Outstanding amounts: if a GmbH pays in only 12,500 EUR, the other 12,500 EUR is a claim of the company against the shareholders, due on demand and in insolvency. Treat it as a personal liability.
6. Sacheinlage in a GmbH: the Gesellschaftsvertrag names the asset and the share it covers, a Sachgründungsbericht explains the valuation, and the Registergericht may demand evidence such as invoices or a valuation report (§ 5 Abs. 4, § 8 Abs. 1 Nr. 5 GmbHG). Software and IP can be contributed this way, but the founders remain liable for any shortfall in value (§ 9 GmbHG).
7. UG reserve: 25 % of each Jahresüberschuss is booked to the gesetzliche Rücklage. The Steuerberater does this in the Jahresabschluss; the founders must not distribute it.

Handelsregister: What the Court Examines

• Name (Firma): must be distinctive, not misleading and distinguishable from every other company registered at the same court (§ 18 and § 30 HGB). Pure descriptive terms ("Software GmbH") are rejected; fantasy words, personal names and combinations pass. The IHK's free name check (Firmenrechtliche Vorabanfrage) mirrors the court's practice.
• Unternehmensgegenstand: must be specific enough to say what the business does. "Betrieb eines Unternehmens" is rejected; "Entwicklung und Vertrieb von Software sowie damit verbundene Dienstleistungen" passes. Regulated activities (finance, insurance, some crafts) trigger a demand for the licence.
• Sitz and Geschäftsanschrift: the Sitz is a German municipality; the inländische Geschäftsanschrift is published and is where writs are served (§ 8 Abs. 4 GmbHG). Keep it current; an outdated address leads to public service and default judgments.
• Geschäftsführer eligibility: the filing contains the Versicherung under § 6 Abs. 2 and § 8 Abs. 3 GmbHG that no disqualifying convictions or professional bans exist and that the notary explained the duty of disclosure.
• Gesellschafterliste (§ 8 Abs. 1 Nr. 3, § 40 GmbHG): the notary files it; it shows each shareholder, the nominal value of each share and the percentage. Only listed persons count as shareholders towards the company (§ 16 GmbHG).
• The court communicates through the notary. Rückfragen (queries) are the main cause of delay; a clean filing is entered without correspondence.

Formation Procedure

1. Choose and check the name. Search the Handelsregister (handelsregister.de) and the DPMA trademark register; the IHK offers a free preliminary name check that the Registergericht usually follows. Names must be distinctive, not misleading, and carry the correct suffix.
2. Fix the structure: shareholders and percentages, Geschäftsführer, sole or joint representation, § 181 BGB release, Unternehmensgegenstand, Sitz and business address.
3. Draft the Gesellschaftsvertrag or choose the Musterprotokoll. The notary is neutral and will not advise one shareholder against another; a lawyer drafts the founder-protective clauses.
4. Notary appointment (Beurkundung). All shareholders attend in person or by notarised power of attorney, with identity documents. Since 2022 a cash formation can be notarised in a video session through the Bundesnotarkammer's online procedure, and the scope has been extended since; ask the notary what is currently possible.
5. Open the business bank account and pay in the Stammkapital. This is the step that most often takes weeks: banks run KYC on all shareholders and beneficial owners. Approach two banks in parallel before the notary date.
6. Handelsregisteranmeldung. The Geschäftsführer signs the filing before the notary (Beglaubigung), including the capital assurance and the § 6 GmbHG declaration. The notary files electronically with the Amtsgericht; the court invoices its fee under the Handelsregistergebührenverordnung.
7. Registration and publication. The Registergericht examines and enters the company in Abteilung B (HRB number). From this moment the company exists as a legal person. The notary sends the Handelsregisterauszug; order a certified copy for the bank and the Gewerbeamt.
8. Transparenzregister. Report the wirtschaftlich Berechtigte (natural persons holding more than 25 % of shares or votes, or exercising control; § 3 GwG) without undue delay. Since the register became a Vollregister in 2021 the Handelsregister entry does not substitute for this. An annual fee applies.
9. Gewerbeanmeldung at the local Gewerbeamt or Ordnungsamt (§ 14 GewO) at the start of business, with the Handelsregisterauszug and the Geschäftsführer's ID. Some trades require an Erlaubnis first.
10. Berufsgenossenschaft. Register with the competent statutory accident insurer within one week of starting (§ 192 SGB VII), even without employees; the Gewerbeamt's notification does not always arrive in time. For software companies this is usually the VBG.
11. Fragebogen zur steuerlichen Erfassung. Submit electronically via ELSTER within one month of formation (§ 138 AO). Request the Umsatzsteuer-Identifikationsnummer in the same questionnaire; the Bundeszentralamt für Steuern issues it once the Finanzamt has assigned the Steuernummer.
12. Employer registrations, when hiring: Betriebsnummer from the Bundesagentur für Arbeit, registration with the employees' Krankenkassen, Lohnsteueranmeldung via ELSTER.

Gewerbeanmeldung and the Notifications It Triggers

The Gewerbeanmeldung is a one-page form (Beschreibung der Tätigkeit, Betriebsstätte, Zahl der Beschäftigten, Rechtsform, Vertretungsberechtigte). It is filed at the municipality of the Betriebsstätte, increasingly online through the municipal portal or the Einheitlicher Ansprechpartner of the state. The Gewerbeamt forwards it to:

• the Finanzamt, which may send its own request for the Fragebogen if you have not filed it yet;
• the IHK, whose membership is automatic for a GmbH under the IHKG and whose Beitrag starts with the first year (ask the IHK about relief for small companies);
• the Handwerkskammer, if the activity is a craft;
• the Berufsgenossenschaft and the Landesamt für Statistik;
• the Gewerbeaufsicht and, for some trades, the Ordnungsamt.

Freiberufler (§ 18 EStG: engineers, doctors, lawyers, some IT consultants working personally) do not file a Gewerbeanmeldung as individuals. A GmbH is always gewerblich by form (§ 2 Abs. 2 GewStG) and always files, whatever its activity.

The Fragebogen zur steuerlichen Erfassung

The questionnaire for a Kapitalgesellschaft asks, among other things, for:

• Gründungsdatum, Handelsregister data, Gesellschafter and their shares, Geschäftsführer.
• Expected turnover and profit for the first and second year. Estimate conservatively; the Finanzamt sets Vorauszahlungen for Körperschaftsteuer and Gewerbesteuer from these figures, and over-optimism ties up cash.
• Kleinunternehmerregelung: yes or no. A GmbH with real input costs almost always says no.
• Istversteuerung under § 20 UStG: apply here if eligible; it delays Umsatzsteuer until the customer pays.
• Rhythm of Umsatzsteuervoranmeldung and application for Dauerfristverlängerung.
• Request for the USt-IdNr.
• Bank account for refunds; SEPA-Lastschriftmandat for the Finanzamt, which removes late-payment risk.
• Whether employees are or will be hired, which starts the Lohnsteuer process.
• Empfangsvollmacht for the Steuerberater, so notices go to the person who reads them.

The Finanzamt then assigns the Steuernummer, usually within a few weeks; the USt-IdNr follows from the BZSt. Until both exist, issue quotes or invoices without Umsatzsteuer shown, or wait; an invoice that shows tax without a Steuernummer is defective for the customer's Vorsteuerabzug.

Timelines and Cost Components

Step	Typical duration	Cost driver
Name check and drafting	1 to 2 weeks	Lawyer's time for an individual contract
Notary appointment	Days to get a date	GNotKG fees on the Geschäftswert; a Musterprotokoll UG is the cheapest case
Bank account and capital	1 to 6 weeks	Account fees; this is the bottleneck
Handelsregister entry	1 to 4 weeks after filing, court dependent	Court fee under the HRegGebV
Transparenzregister	Same day online	Annual fee
Gewerbeanmeldung	Same day	Small municipal fee
Steuernummer and USt-IdNr	2 to 8 weeks after the questionnaire	None

In principle a Musterprotokoll UG costs a few hundred euros in notary and court fees; a GmbH with an individual contract runs to four figures once legal drafting is included, plus the capital itself. Ask the notary for a GNotKG estimate before the appointment and check current court fees with the Amtsgericht; both change.

Worked Example: Two Founders, GmbH

• Stammkapital 25,000 EUR in 25,000 shares of 1 EUR: founder A 15,000 shares, founder B 10,000 shares.
• Paid in at formation: A 7,500 EUR, B 5,000 EUR (half each, satisfying both the one-quarter-per-share rule and the 12,500 EUR total). 12,500 EUR remains outstanding and is disclosed in the Jahresabschluss.
• Both are Geschäftsführer with Einzelvertretungsbefugnis and § 181 BGB release; the contract includes 48-month vesting with a 12-month cliff, Vinkulierung, good-leaver and bad-leaver pricing and a Mitverkaufspflicht at a 75 % majority, plus a Gründungsaufwand clause allowing the company to bear formation costs up to a stated amount.
• Day 0 notary; day 12 capital paid in on an account opened for the company i.G.; day 13 filing; day 31 HRB entry and Transparenzregister; day 32 Gewerbeanmeldung and Berufsgenossenschaft; day 35 ELSTER questionnaire; day 61 Steuernummer; day 70 USt-IdNr.
• First customer invoice on day 72 with full Rechnungspflichtangaben including the USt-IdNr; until then quotes only.

Worked Example: Solo UG with Musterprotokoll

• One founder, 3,000 EUR Stammkapital in 3,000 shares of 1 EUR, fully paid before filing. Musterprotokoll for the Einpersonengesellschaft; the founder is the sole Geschäftsführer.
• Year 1 Jahresüberschuss 8,000 EUR: 2,000 EUR goes to the gesetzliche Rücklage, 6,000 EUR is distributable or retained.
• Year 3: the founder brings in a co-founder and an angel. The Musterprotokoll cannot carry vesting or investor rights, so the shareholders adopt a full Gesellschaftsvertrag at the notary, raise the capital by cash to 25,000 EUR and change the suffix to GmbH in the same appointment. Two notary rounds instead of one; that is the price of the cheap start.

Document Checklist for the Notary

• Identity documents of all shareholders and Geschäftsführer; for corporate shareholders a current Handelsregisterauszug and evidence of who may represent them; for foreign corporate shareholders an apostilled register extract with translation.
• Final Gesellschaftsvertrag or the Musterprotokoll data: name, Sitz, Unternehmensgegenstand, capital, shares per shareholder, Geschäftsführer.
• A business address in Germany that receives mail; a registered-office service is acceptable, a bare mailbox is not.
• Decisions on representation rules and § 181 BGB.
• The list of wirtschaftlich Berechtigte for the Transparenzregister entry.
• A bank that has agreed in principle to open the account.

Bank Account Checklist

• Ask the bank before the notary date whether it opens accounts for companies i.G. and which documents it needs: notarised Gesellschaftsvertrag, Gesellschafterliste, IDs of all shareholders above the KYC threshold and of all Geschäftsführer, proof of address, a description of the business model.
• Expect questions about source of funds for the Stammkapital and about expected transaction volumes; answer in writing and keep the answers consistent with the Fragebogen.
• The capital transfer must come from the shareholders' own accounts with a reference such as "Stammeinlage Gesellschafter A"; the bank's Einzahlungsbestätigung or a statement showing the balance is what the notary wants to see.
• Do not use the capital account for personal spending in the i.G. phase; every debit before filing is a question at the Registergericht.

Geschäftsführer Duties That Start Immediately

• Bookkeeping: a GmbH keeps double-entry books from day one (§ 238 HGB) and prepares a Jahresabschluss; have the Steuerberater engaged before the first transaction.
• Offenlegung: file the Jahresabschluss with the Unternehmensregister within twelve months of the financial year end (§ 325 HGB); Kleinstkapitalgesellschaften may deposit a reduced version. The Bundesamt für Justiz imposes Ordnungsgeld for late filing; check the current minimum.
• Insolvenzantragspflicht (§ 15a InsO): file within three weeks of Zahlungsunfähigkeit or six weeks of Überschuldung. Personal liability and criminal exposure attach to delay; monitor liquidity monthly with a 13-week cash view.
• Geschäftsbriefe (§ 35a GmbHG): letters, invoices and business emails must show the full name with suffix, Sitz, Registergericht, HRB number and all Geschäftsführer.
• Gesellschafterliste: every change of shareholders needs a new list filed by the notary; only persons on the list count as shareholders towards the company (§ 16 GmbHG).
• Transparenzregister updates whenever beneficial ownership changes.
• Gesellschafterversammlung: at least one meeting per year to approve the Jahresabschluss and decide on the result (§ 42a, § 46 GmbHG); minutes go into the corporate file.

Common Mistakes

• Spending the Stammkapital before the Handelsregister filing and signing the Versicherung anyway.
• Choosing the UG to save 12,000 EUR, then paying two notary rounds and a year of sceptical enterprise buyers.
• Signing an office lease or an employment contract before registration, creating personal liability under § 11 Abs. 2 GmbHG.
• Skipping the Transparenzregister because "the Handelsregister already knows".
• Forgetting the Berufsgenossenschaft and receiving a back-dated contribution notice.
• Using the Musterprotokoll for a multi-founder team with unequal contributions and no vesting.
• Sending invoices with Umsatzsteuer before a Steuernummer exists, or to EU customers without a USt-IdNr.
• Naming the company after a trademark someone else holds; the Registergericht does not check trademarks.
• Letting the company pay notary and court fees without a Gründungsaufwand clause, which the Steuerberater later has to unwind as a verdeckte Gewinnausschüttung.
• Over-estimating first-year profit in the Fragebogen and financing the Finanzamt with quarterly Vorauszahlungen.

Limits

This skill describes German company-formation mechanics as they are commonly practised; it is not legal or tax advice. Fees, thresholds and procedures change, so confirm current figures with the notary (GNotKG), the Amtsgericht, the Finanzamt and the IHK. Individual Gesellschaftsverträge, investor terms, Sacheinlagen, foreign or corporate shareholders and regulated activities need a Rechtsanwalt (ideally a Fachanwalt für Handels- und Gesellschaftsrecht) and a Steuerberater before the notary date. Nothing here addresses sanctions or export-control screening of shareholders or customers; the competent authorities and specialised counsel handle that.