Company Formation: Germany 2026

Chapter 1: Overview and Legal Foundation

1-1. The German Legal Framework for Companies

Germany operates a civil law legal system in which company formation and governance are governed by a layered set of federal statutes. Unlike common law jurisdictions where companies may be formed through a simple online filing, German company formation involves mandatory notarization by a public notary (Notar) and registration with the local commercial register (Handelsregister) maintained by the competent district court (Amtsgericht).

The principal statutes governing the formation of limited liability companies and stock corporations in Germany are:

• GmbH-Gesetz (GmbHG) -- the Limited Liability Companies Act, originally enacted in 1892 and most recently amended in 2024. This statute governs the formation, internal governance, capital maintenance, and dissolution of the GmbH, which is by far the most common corporate form for small and medium-sized enterprises in Germany.

• Aktiengesetz (AktG) -- the Stock Corporation Act of 1965, governing the formation and operation of the Aktiengesellschaft (AG), the German public stock corporation. While primarily used by larger enterprises and those seeking public capital market access, the AG is also available to smaller ventures.

• Handelsgesetzbuch (HGB) -- the Commercial Code, which governs general commercial matters including the obligation to register with the Handelsregister, accounting requirements, and the legal effects of commercial registration.

• Gewerbeordnung (GewO) -- the Trade Regulation Act, which requires all businesses to obtain a trade license (Gewerbeanmeldung) from the local trade office (Gewerbeamt) before commencing commercial activity.

• Burgerliches Gesetzbuch (BGB) -- the Civil Code, which provides the general framework for legal capacity, agency, and contractual obligations that underpin all corporate transactions.

1-2. Federal Structure and Jurisdiction

Germany is a federal republic composed of 16 Lander (states). Company law is exclusively federal legislation, meaning the GmbHG, AktG, and HGB apply uniformly across all states. However, certain administrative procedures -- particularly trade licensing under the GewO and local tax registration -- are administered at the municipal or state level.

The commercial register is maintained by the local Amtsgericht (district court) for the jurisdiction in which the company has its registered seat (Sitz). Since 2007, all commercial register entries are maintained electronically and are publicly accessible through the official portal at handelsregister.de. Filings must be submitted electronically through a Notar.

1-3. Who May Form a Company

There is no German nationality or residency requirement for shareholders (Gesellschafter) of a GmbH or stockholders (Aktionare) of an AG. Any natural person of legal age or any legal entity -- whether German or foreign -- may participate as a founder.

A GmbH may be formed by a single founder (Einpersonengesellschaft). There is no maximum number of shareholders. An AG requires a minimum of one founder under the current AktG (Section 2), following the reform that removed the earlier five-founder requirement.

However, the managing director (Geschaftsfuhrer) of a GmbH must be a natural person with full legal capacity. There is no residency requirement for managing directors, although practical considerations -- such as the need to appear before a German Notar and respond to official correspondence at the registered address -- often favor having at least one Germany-based director.

1-4. Registered Seat and Business Address

Every German company must have a statutory seat (Sitz) within Germany, which must be specified in the articles of association (Gesellschaftsvertrag for a GmbH, Satzung for an AG). The registered seat determines the competent commercial register court, the competent tax office (Finanzamt), and the applicable Chamber of Commerce (IHK).

Since the reform of the GmbHG in 2008 (MoMiG -- Gesetz zur Modernisierung des GmbH-Rechts und zur Bekampfung von Misbrauchen), the statutory seat and the actual place of administration may differ. A GmbH may have its statutory seat in one German city while conducting its operations from another location, including from abroad. However, the statutory seat must remain within Germany.

In addition to the statutory seat, every GmbH must maintain a business address (Geschaftsanschrift) within Germany that is entered in the commercial register. This address must be a physical address where official correspondence and legal process can be delivered. Post office boxes are not acceptable.

1-5. The Role of the Notar

The German Notar occupies a unique position in the company formation process. Unlike a common law notary public, a German Notar is a fully qualified jurist who has passed both state examinations (Staatsexamen) and been appointed by the state justice ministry. The Notar acts as an independent, impartial officer of the preventive justice system (vorsorgliche Rechtspflege).

Notarization is mandatory for the following acts in connection with company formation:

• Authentication (Beurkundung) of the articles of association (GmbHG Section 2)
• Authentication of changes to the articles of association (GmbHG Section 53)
• Authentication of share transfers (GmbHG Section 15, paragraph 3)
• Filing the application for commercial registration (HGB Section 12)
• Providing the list of shareholders to the commercial register (GmbHG Section 40)

The Notar also performs an identity verification function, confirming the identity of the founders through official identification documents. The Notar's fees are regulated by the Court and Notary Fees Act (Gerichts- und Notarkostengesetz, GNotKG) and are not negotiable.

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Quick Decision Matrix

Choose the right business structure in 5 seconds.

5-second answer: Most small businesses should start with an LLC (or local equivalent). Read Chapter 2 for requirements, Chapter 3 for step-by-step setup.