GmbH Formation: Procedure, Preparation and Costs

The GmbH is by far the most common legal form for companies in Germany; for smaller ventures, the UG (haftungsbeschränkt) offers a variant with lower share capital. On this page we have compiled everything you need to prepare your formation – from the procedure and the choice of articles of association to guidance for foreign shareholders and the costs involved.

The Procedure from Instruction to Registration

From first contact to the registered company, the process usually takes two to four weeks if everything runs smoothly. This is how the formation procedure works:

The formation procedure at a glance

1. Instruction and Preparation You instruct us via our online data sheet or by telephone or e-mail. We clarify open points – for example regarding the company name, the articles of association or foreign parties – and agree on the timeline.
2. Drafts for Review We prepare the necessary documents (articles of association or model protocol, appointment of the managing director, list of shareholders, commercial register application) and send you the drafts by e-mail well before the appointment.
3. Notarisation Notarisation appointment at our office – on request and where the statutory requirements are met, also in the online procedure via video communication. Anyone unable to attend can be represented.
4. Bank Account and Share Capital You open a bank account in the name of the newly formed company (GmbH i. G.), pay in the share capital and send us proof of payment (bank statement or bank confirmation, by e-mail is sufficient).
5. Filing with the Commercial Register We file the commercial register application electronically with the competent registry court. The court typically requests an advance on costs by letter – the company must therefore be reachable by post at its business address.
6. Registration After payment of the advance on costs, the registry court usually registers the company within two to three weeks of the filing. We forward the registration notification to you by e-mail – this completes the registration process.
7. Obligations after Registration Further steps follow, including reporting the beneficial owners to the Transparency Register, tax registration and, where applicable, business registration. You will find all details on the steps following notarisation in our notes following GmbH formation.

Model Protocol or Individual Articles of Association?

For straightforward formations, the law provides a model protocol (Musterprotokoll). It combines the articles of association, the appointment of the managing director and the list of shareholders in a single deed, which makes it somewhat less expensive – however, its content cannot be modified.

In practice, however, we consider the model protocol advisable only where the company has a single shareholder or where a complete revision of the articles of association is planned shortly after formation, as the rudimentary provisions of the model protocol are usually not suitable where there are multiple shareholders.

If in doubt, please contact us – we will be happy to advise you on which option best suits your project. The preparation of the articles of association is in any event covered by the notarisation fee, so that preparing your own articles of association does not bring any cost advantage. Of course, we are also happy to notarise articles of association and/or a shareholders' agreement prepared by your lawyer.

Choice of Company Name (Firma)

Particular attention should be paid to the choice of the company name (Firma). The name must be distinctive and must not be misleading. Further information and helpful suggestions can be found on the website of the Berlin Chamber of Commerce (IHK Berlin). We generally consider the (fee-based) preliminary review of the name and business purpose offered there to be worthwhile in order to avoid delays and potentially unnecessary costs in the registration process. For companies with their registered office outside Berlin, you may enquire with the locally competent Chamber of Commerce about similar services. Should you make a preliminary enquiry with the IHK, please send us the positive result for submission to the commercial register, as this may expedite the registration.

Domestic Business Address

When choosing the domestic business address, please note that the company must already be reachable by post at this address during the formation process (correct labelling of the letterbox!), as the registry court will typically request an advance payment of court fees by letter to this address. Non-delivery leads to unnecessary delays in the registration process. If you are unable or unwilling to display the company's name on the letterbox, it is also possible to use a c/o address (xy GmbH, c/o Hans Mustermann) or to have a natural person registered as an authorised recipient in the commercial register.

Formation through Representatives and with Foreign Parties

Not all parties need to attend the formation in person – and foreign shareholders, whether natural persons or companies, can readily form a German GmbH. To ensure that the appointment and the registration run smoothly, the following points should be clarified at an early stage.

Representation at the Notarisation

Anyone unable to attend the notarisation appointment can be represented: either by an authorised representative holding a power of attorney with notarially certified signature, or by a representative without power of attorney whose declarations are subsequently confirmed by a notarially certified ratification (Nachgenehmigung). The ratification only requires a certification of signature and can also be effected abroad before a local notary or a German diplomatic mission – we will provide you with the text of the declaration of ratification. In practice, representation without power of attorney followed by ratification is often the simplest route, as no power of attorney needs to be obtained before the appointment. In the case of a formation by a single shareholder, representation without power of attorney is not possible; however, a formation on the basis of a previously granted power of attorney remains possible. Depending on the country, declarations certified abroad usually require an apostille or legalisation.

Foreign Companies as Shareholders

If a foreign company participates in the formation, its existence and the authority of the persons acting on its behalf must be evidenced. A current extract from the foreign commercial register is customary; for jurisdictions without a meaningful register (e.g. the USA or the United Kingdom), a Certificate of Incumbency or Certificate of Good Standing or a certificate issued by a foreign notary may be used. These documents regularly require an apostille or legalisation and, where applicable, a certified translation. Please contact us at an early stage – we will be happy to clarify in advance which evidence is required in your specific case, as obtaining it abroad can take some time. Further information can also be found on our page on international matters.

Foreign Natural Persons

Neither shareholders nor managing directors need to hold German citizenship or be resident in Germany. A valid passport or identity card is sufficient for the notarisation. Dr. Baer notarises in German, English and Dutch; for other languages, an interpreter can be called in – see our page on international matters. For the online procedure, the identity document must additionally be technically suitable (electronically readable), which is not the case with some foreign documents – please check this in advance.

Further helpful information on company formation can be found on the website of the German Federal Chamber of Notaries (Bundesnotarkammer).

Frequently Asked Questions about GmbH Formation