The UG (haftungsbeschränkt), which stands for “Unternehmergesellschaft (haftungsbeschränkt)” and translates to “entrepreneurial company (with limited liability)”, is a legal form in Germany designed for business incorporation. It is often referred to as a “Mini-GmbH” or “1-Euro-GmbH” due to its low minimum capital requirement.
What is “UG (haftungsbeschränkt)”?
The UG (haftungsbeschränkt) is not an independent legal form but a variant of the GmbHGmbH, which stands for "Gesellschaft mit beschränkter Haftung," translates to "Company with Limited Liability" in English. This term refers to... More (Gesellschaft mit beschränkter Haftung), created to provide a more accessible option for entrepreneurs with limited capital[4][7]. It was introduced in 2008 as part of the “Act on the Modernisation of the German Limited Liability Company Law and the Combating of Malpractice” (MoMiG)[6]. This legal form is particularly suitable for small businesses and startups due to its lower capital requirements and the benefit of limited liability, which protects the private assets of the shareholders[2][4].
More information about “UG (haftungsbeschränkt)”
The UG (haftungsbeschränkt) can be founded with as little as €1 in share capital, although it is recommended to start with at least €1,000 to cover initial costs and investments[7]. Shareholders are not personally liable for the company’s debts, and the company must allocate 25% of its annual profits to a legal reserve until the share capital reaches €25,000, at which point it can be converted into a GmbH[2][12]. The UG (haftungsbeschränkt) is subject to corporate tax, solidarity tax, trade tax, and payroll tax[2].
Related to “UG (haftungsbeschränkt)”
Here are some additional terms that are related to UG (haftungsbeschränkt):
- GmbHGmbH, which stands for "Gesellschaft mit beschränkter Haftung," translates to "Company with Limited Liability" in English. This term refers to... More: A legal form with a minimum capital requirement of €25,000, offering limited liability and separate legal personality[6].
- gUG (haftungsbeschränkt): A non-profit version of the UG (haftungsbeschränkt), which is also bound by the German Limited Liability Companies Act and must pursue charitable purposes[5].
- Stammkapital: The share capital required to establish a UG or GmbHGmbH, which stands for "Gesellschaft mit beschränkter Haftung," translates to "Company with Limited Liability" in English. This term refers to... More, which is fully liable for the company’s obligations[7].
The UG (haftungsbeschränkt) offers a flexible and low-threshold entry into the German market for entrepreneurs, making it an attractive option for those looking to start a business with limited resources.