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Corporate forms

What are corporate forms

Reference is made to the various legal structures that companies can adopt. How a company is organized, who is responsible, how it is taxed and what legal requirements it must meet - all of this is determined by these forms. There are different types of companies in Germany, ranging from sole proprietorships to partnerships such as GbR or OHG as well as corporations such as GmbH or AG.

Sole proprietorship

A sole proprietorship is run by a single person and is the simplest form of company formation. The owner is fully responsible and is liable for the company's debts with all of their assets. Small, low-risk companies in particular benefit from this form.

Civil law partnership (GbR)

The GbR is a form of partnership in which two or more people form a company together. Liability here is personal and unlimited, but there is no minimum capital contribution. The civil law partnership is suitable for small companies that are managed by several partners. GmbH stands for Gesellschaft mit beschränkter Haftung (limited liability company). The share capital of the GmbH is divided into shares, as it is a corporation. The liability of the partners is limited by the company's assets, so they are not liable with their personal assets. Medium-sized companies therefore find the GmbH attractive. The GmbH is a frequently chosen form for companies in Germany and the EU.

Stock corporation (AG)

Another form of corporation is the public limited company, in which the share capital is divided into shares. The shareholders own the company, but are only liable up to the amount of their contribution. Large companies that require a broad distribution of ownership and a high level of capital are particularly suitable for the AG. In Switzerland, the AG is a common form of company.