Companies wishing to open an office, branch or subsidiary in Germany will want to establish the appropriate legal entity based on several factors, including the desired role of the shareholders, possible limitations of liability and tax-related aspects. Contact our U.S.-based team for help in selecting the correct one for your venture to avoid potential issues or complications further down the road.
A limited liability company (GmbH) can be established by one or more persons and its registered office must be in Germany.
A stock corporation (Aktiengesellschaf, or AG) has a legal personality separate from its shareholders. The shareholders are not liable to third parties for acts of the company, and the registered office must be located in Germany.
A branch office is for companies with a registered office abroad and wishing to establish a presence in Germany. However, the office must have a certain degree of independence, both organizationally and in management, and it cannot have a temporary purpose.
Partnerships limited by shares (Kommanditgesellschaft auf Aktien, or KGaA) are for entities where one partner has unlimited liability, while limited shareholders participate in the company’s oversight without responsibility for the liabilities of the company.
The GmbH & Co. KG is a special form of limited partnership, in which a limited liability company acts as the personally liable partner. This flexibility is often favored by medium-sized companies and family businesses, in large part due to the corporate and tax law advantages, as well as the organizational benefits of corporations
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