Home / What is the difference between a GmbH and a UG?
What is the difference between a GmbH and a UG?
To open a company in Germany, a GmbH needs minimum share capital of 25,000 euro and a UG can be formed with 1 euro. A UG suits a small business that wants a lower setup cost. It is usually less well known, and some partners are less willing to contract with it.
A GmbH does not need the longer articles and director-appointment steps of a stock corporation, so the filing can move faster. Officers have no fixed term, so you do not pay to re-register them at the end of a term. Profit can be shared other than by ownership ratio, and decisions do not require a shareholders meeting.
A UG fits a family or small business that wants lower cost and fewer rules, with no near-term plan to expand or list, and consumer businesses such as a German online shop, restaurant or salon.
Compared with a stock corporation, a UG can be harder in hiring and in some commercial partnerships. Choose in a free consultation, looking at capital, customers and later tax.