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Parent Category: Legal Forms

Created on Thursday, 11 December 2008 15:14

Last Updated on Sunday, 10 February 2013 11:51

Shares of a GmbH or UG

This page is all about the distribution of company shares and shareholders' loans to the company.

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You mentioned that the German limited has become cheap and competitive to the British Limited. How much money do I need to fund the company so it will be registered?

Cheap is not exactly the right word! Think of it as affordable. In any case, the minimum capital of the GmbH is € 25,000 and UG is € 1.
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How about distributing shares? If and how has this possible?

The company’s shareholders are able to determine individually the amount of their shares and so line up the company more in accordance with their wants and needs. The minimum share is € 1.
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I’ve heard something strange about the registry keeping a list of shareholders? What’s that all about?

Take it literally. The court will be keeping such a list because only those persons who are on the list will be legally considered as a shareholder. By the way, such a list is nothing new. This list enables purchasers and sellers to know easily if a person belongs to the company or not. As pointed out in a previous article, these details are retrievable online. A side effect will also be a motivation for the shareholders to keep this list continuously up to date. The purchaser of shares has the right to demand inclusion in the shareholders list. The government hopes to curb misuse such as money laundering when shareholders are clearly and easily seen. This is to enhance the trust in this kind of legal entity.
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You just mentioned that we shareholders will be more motivated to keep the shareholders list up to date. How and why?

I don’t see a reason why we should be so picky about it as any changes will surely effect fees of the one kind or other. If you want to be sure that really only the persons you want are holding shares, then you will keep the list up-to-date.
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Is it possible to fund the company with a shareholder's loan? The thing is that I don't have that much money to "only" be lying around in the company's bank. 

It is possible that the shareholder gives his company a loan. Generally, that is a legal idea. The only time when you be disadvantaged in this regard will during insolvency of the company. §30 GmbHG determines that funds needed to run the company may not be returned to the shareholders. This gives grounds for the bankruptcy manager to have assets returned. When company assets are to be liquidated, shareholder's loans come last (§39 I no. 5 InsO).
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