Limited liability company (GmbH)
The LLC (GmbH) is a trade company with a corporate organisation and its own legal personality. Unlike partnerships, it is not the combination of persons, but the provision of capital amounts which is in the foreground. It can be set up for any admissible purpose. It has a share capital determined by the Shareholders’ Agreement, which matches the sum total of the share contributions to be made by the shareholders. Only the company is liable to creditors for corporate debts.
Such a summarising definition is not contained by the Limited Liability Companies Act. It is assumed by the act.
Precisely for people founding a company who have and need very little share capital at the beginning (e.g. in the service area), there is not the possibility of founding an LLC without a certain minimum share capital, the limited liability entrepreneurial company.
The LLC is the simplest form of a capital company. One great benefit of this legal form is its flexibility. There is a great degree of liberality in the organisation of the Shareholders’ Agreement. The LLC is equally suited to small enterprises, medium-sized family-run companies or also large-scale companies.
Compared with a stock corporation, the LLC is partly subject to less strict directives. Formation is less formalised and therefore easier and cheaper. One-man foundation is also admissible. Normally, a Supervisory Board is not necessary with an LLC.
On the other hand, an LLC is not a public company. Sale and assignment of shares possible without limitations must be certified by a Notary Public. However, assignability of shares can also be made dependent on other prerequisites, e.g. the approval of the co-shareholders, in the Shareholders’ Agreement.ORDER