Go-To-Do
Setup your business in Dortmund, Germany: www.go-to-do.com
Economic Development Dortmund
Limited Liability Company – LLC
(„Gesellschaft mit beschränkter Haftung – GmbH“)
Contrary to the general or limited partnerships, the limited liability
company is a capital company, i.e. the LLC is not characterised by the
partnership of persons, but by the contribution of capital. Some special
features - legal (cf. 
“LLC-Act”
- “GmbH-Gesetz”) and fiscal - result from this fact. The
LLC is subject to pay income tax and to pay corporate tax (cf. more under
“Taxes”).
An essential feature of the LLC is the limitation of liability, i.e.
the members are not personally liable for the liabilities of the enterprise,
but with the assets of the company. The LLC’s business is led by
a “firm”, i.e. is takes a name with the annex of the legal
form “Limited Liability Company” (“Gesellschaft mit
beschränkter Haftung”) or the abbreviation “LLC”
(“GmbH”).
Bodies of the LLC
An LLC has the following bodies:
- Chief Executive Officer (CEO)
The management of an LLC can be taken over by one or by several persons.
In general, the competence of the CEO is fixed in the company agreement.
- The Company Meeting
The company meeting controls the LLC and the CEO. Unless otherwise ruled
in the company agreement, the company meeting has a far-reaching authority
to instruct the CEO.
- Board of Directors
The board of directors is not compulsory by law, it can be installed
voluntarily. Exception: if the LLC has more than 500 employees, it is
subject to the regulations of the legal participation of the employees
(“Arbeitnehmer-Mitbestimmung”) and is thus subject to install
a board of directors.
An LLC has the right to give the general power of attorney (“procuration”)
(“Prokura erteilen”), i.e. it names a person (“Prokurist/-in”)
who is authorised to sign in the name of the company. The given general
power of attorney has to be listed in the Register of Companies.
Special form “One-man LLC”
Though the LLC is a kind of company, that means of several members, you
may as well found an LLC as a single person (the so-called “one-man
LLC” – “Ein-Mann-GmbH”). The formalities are the
same as with the regular LLC. The advantage is that you can limit your
liability and keep completely controlling your enterprise at the same
time.
Steps of foundation
For the foundation of an LLC, an initial capital (“Stammkapital”)
of at least € 25,000 is necessary. It is composed of the so-called
initial capital contributions (“Stammeinlagen”) of the members
(at least € 100). The contributions can consist of material assets,
as well. Make sure before the foundation if you can raise this
capital together with the other members. Natural persons as well as legal
persons can be members.
The LLC is constituted by the conclusion of a notarised company agreement.
In addition, the notary has to record the conclusion. The company agreement
has to contain the following information
- firm (name of the company including LLC annex)
- location of the company
- object of the company
- amount of the initial capital
- capital invested by each member
- in case of material assets a report on the material assets (“Sachgründungsbericht”)
Before starting the business, a CEO has to be appointed.
The last step is the entry of the LLC in the Register of Companies.
The LLC becomes a legal person only by this entry and thus is considered
to be founded. The entry has to be made by the CEO whose signature is
additionally notarised. You will find a list of the necessary documents
and specifications for the entry in the Register of Companies in the check
list Register of Companies.
|
Corporation
Limited partnership