German business law offers a compact catalogue of legal forms (Rechtsformen), each with its own rules on liability, governance and registration. The choice of form shapes how a business is taxed, how decisions are taken, how partners or shareholders are bound, and where the entity is recorded in the commercial register. This page gives an editorial overview of the most common forms and the facts that appear in the register for each.
Corporate forms
Corporate forms create a legal person distinct from its owners. They are recorded in section B of the commercial register, known as HRB (Handelsregister Abteilung B).
GmbH (Gesellschaft mit beschränkter Haftung)
The GmbH is the dominant form for privately held businesses in Germany. It requires a minimum share capital of EUR 25,000, a notarised Gesellschaftsvertrag, and at least one managing director (Geschäftsführer). Liability is limited to the company's assets; shareholders are not personally liable for company debts except in narrowly defined circumstances. The GmbH is well suited to operating businesses, holding structures and joint ventures.
UG (haftungsbeschränkt)
The Unternehmergesellschaft is a variant of the GmbH introduced to give founders a low-capital entry point. It can be formed with a share capital as low as EUR 1, but it must allocate a statutory reserve from its annual profits until it reaches the GmbH minimum capital, at which point it can convert. The suffix "haftungsbeschränkt" is part of the firm and must be used in business dealings.
AG (Aktiengesellschaft)
The AG is the German stock corporation. It requires a minimum share capital of EUR 50,000, a Vorstand (management board) and a Supervisory Board (Aufsichtsrat), and is governed by the Aktiengesetz. The governance structure is more rigid than that of a GmbH and is designed to accommodate dispersed ownership, public offerings and institutional investors. Capital is divided into shares, which may be listed or unlisted.
Partnerships and merchant forms
Partnerships and the registered merchant form are recorded in section A of the commercial register (HRA). They do not create a separate legal person in the same way as corporate forms, and the treatment of liability reflects that.
e.K. (eingetragener Kaufmann)
The eingetragene Kaufmann or Kauffrau is an individual merchant entered in the commercial register under their own name. There is no separation between the merchant's business assets and personal assets; the merchant is personally liable for all business obligations. The form is used by sole traders who exceed the threshold for simple commercial activity or who choose to register voluntarily.
OHG (offene Handelsgesellschaft)
The OHG is a general commercial partnership. All partners are jointly and severally liable for the obligations of the partnership with their personal assets, and each is generally entitled to represent the partnership unless the partnership agreement provides otherwise. The OHG is governed by the HGB and by the general partnership provisions of the German Civil Code.
KG (Kommanditgesellschaft)
The KG is a limited partnership with two classes of partner. The general partner (Komplementaer) has unlimited personal liability and represents the partnership. The limited partner (Kommanditist) is liable only up to the amount of the agreed contribution once it has been paid in. The form is widely used in family businesses and in structured holding arrangements.
GmbH & Co. KG
The GmbH & Co. KG is a hybrid that combines a KG with a GmbH serving as its sole general partner. The result is a partnership in form, but with limited liability in substance, because the unlimited partner is itself a limited liability company. It is a common structure for operating businesses that want partnership taxation combined with corporate liability protection.
Comparison of legal forms
| Form | Register | Minimum capital | Liability | Governance |
|---|---|---|---|---|
| GmbH | HRB | EUR 25,000 | Limited to company assets | Managing directors; shareholders' meeting |
| UG (haftungsbeschränkt) | HRB | EUR 1 (reserve required) | Limited to company assets | Managing directors; shareholders' meeting |
| AG | HRB | EUR 50,000 | Limited to company assets | Vorstand and Aufsichtsrat |
| KG | HRA | None specified | General partner unlimited; limited partner up to contribution | General partner represents |
| OHG | HRA | None specified | All partners unlimited and joint | Partners represent |
| e.K. | HRA | None specified | Unlimited personal | Sole merchant |
| GmbH & Co. KG | HRA | Via GmbH general partner | Effectively limited through GmbH | GmbH acts as general partner |
In short: HRB is for legal persons with limited liability; HRA is for partnerships and merchants. Reading the prefix on a register number gives an immediate hint about the form and the liability regime.
Related pages
- HRB vs HRA — register sections and what they imply.
- Registration process — steps and actors in formation.
- Managing directors — representation of a GmbH.