A UG needs one euro of share capital, a GmbH 25,000 euros, half of which must be paid in immediately. Looking only at that figure often means picking the legal form that costs more later.
What a UG actually costs
A UG must put a quarter of its annual profit into a statutory reserve until 25,000 euros are reached. That money is tied up, cannot be distributed, and converting into a GmbH costs notary and commercial register fees again. Anyone who expects to be profitable pays the amount anyway -- just spread out and with a surcharge.
What we base the recommendation on
- How quickly and how high profits are expected.
- Whether banks, landlords or large clients are involved, for whom share capital is a signal.
- Whether several shareholders are involved and how flexible their stakes need to stay.
- Whether taking on investors later is realistic.
For a side business with manageable risk, the UG is often right. As soon as external partners have a say, the low capital regularly becomes a topic of conversation.
We go through these points in one meeting and draft the articles so that they still hold when the shareholdings change.