In Germany, you can start various types of businesses, depending on your goals, liability preferences, and investment capacity. Below is a list of the most common types of companies (legal entities) you can register in Germany:

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1. Sole Proprietorship (Einzelunternehmen)

🔹 Best for: Freelancers, small businesses, low-risk ventures
🔹 Liability: Unlimited personal liability
🔹 Minimum capital: €0
🔹 Registration: Simple, via the Trade Office (Gewerbeamt)
🔹 Taxation: Personal income tax rates (progressive, up to 45%)

✅ Pros:

• Easy & quick registration
• No minimum capital
• Lower administrative costs

❌ Cons:

• Full personal liability for debts
• Higher tax burden for higher profits

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2. UG (Unternehmergesellschaft, haftungsbeschränkt) – Mini-GmbH

🔹 Best for: Startups, small businesses, low capital ventures
🔹 Liability: Limited liability (only company assets at risk)
🔹 Minimum capital: €1
🔹 Registration: Notary + Handelsregister (Commercial Register)
🔹 Taxation: 15% Corporate tax + 14-17% Trade tax + 26.375% Dividend tax

✅ Pros:

• Limited liability German Companies
• Low capital requirement for German Companies
• Ideal for first-time entrepreneurs

❌ Cons:

• Profits must be reinvested (until reaching €25,000)
• More paperwork than a sole proprietorship

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3. GmbH (Gesellschaft mit beschränkter Haftung)

🔹 Best for: Medium-sized businesses, established entrepreneurs
🔹 Liability: Limited liability (only company assets at risk)
🔹 Minimum capital: €25,000 (€12,500 must be paid initially)
🔹 Registration: Notary + Handelsregister (Commercial Register)
🔹 Taxation: Same as UG (15% corporate tax + trade tax + dividend tax)

✅ Pros:

• Strong credibility (trusted by banks & partners)
• Full limited liability protection – one of the best German Companies
• Flexible ownership (multiple shareholders possible)

❌ Cons:

• Higher costs & paperwork
• €25,000 minimum capital requirement

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4. AG (Aktiengesellschaft) – Public Limited Company

🔹 Best for: Large businesses, companies planning to go public
🔹 Liability: Limited to company assets
🔹 Minimum capital: €50,000
🔹 Registration: Complex, requires supervisory board & stock regulations
🔹 Taxation: 15% Corporate tax + Trade tax + Dividend tax

✅ Pros:

• Can raise capital through stock issuance
• Good for large-scale businesses with German Companies

❌ Cons:

• Expensive & complex setup
• Requires a board of directors & strict financial reporting

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5. OHG (Offene Handelsgesellschaft) – General Partnership

🔹 Best for: Small partnerships (2+ people)
🔹 Liability: Unlimited personal liability for partners
🔹 Minimum capital: €0
🔹 Registration: Handelsregister (Commercial Register)
🔹 Taxation: Personal income tax rates (progressive)

✅ Pros:

• Simple setup for German Companies
• No minimum capital required

❌ Cons:

• Unlimited liability for all partners

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6. KG (Kommanditgesellschaft) – Limited Partnership

🔹 Best for: Partnerships where one person manages & others invest
🔹 Liability:

• General partner (Komplementär) → Unlimited liability
• Limited partners (Kommanditisten) → Limited to investment
  🔹 Minimum capital: €0
  🔹 Registration: Handelsregister
  🔹 Taxation: Personal income tax rates

✅ Pros:

• Limited partners only risk their investment
• Good for investment-based partnerships and German Companies

❌ Cons:

• General partner bears full liability

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7. GbR (Gesellschaft bürgerlichen Rechts) – Civil Law Partnership

🔹 Best for: Small businesses, freelancers
🔹 Liability: Unlimited personal liability for all partners
🔹 Minimum capital: €0
🔹 Registration: No Handelsregister required
🔹 Taxation: Personal income tax

✅ Pros:

• Easy & fast setup
• No special legal requirements

❌ Cons:

• Each partner is fully liable
• Not suitable for larger businesses

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Which Business Structure is Best for You?

Business Type	Liability	Capital Requirement	Best For
Einzelunternehmen (Sole Proprietor)	Unlimited	€0	Freelancers, small businesses
UG (Mini-GmbH)	Limited	€1	Startups, new businesses
GmbH	Limited	€25,000	Established entrepreneurs
AG	Limited	€50,000	Large corporations
OHG	Unlimited	€0	Small partnerships
KG	Mixed	€0	Investment partnerships
GbR	Unlimited	€0	Freelancers, small groups

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Final Thoughts

If you are working with a partner → OHG (full liability) or KG (limited liability for some partners)

If you want full control & don’t mind personal liability → Sole Proprietorship (Einzelunternehmen)

If you want limited liability but low capital investment → UG (Mini-GmbH)

If you plan to grow a serious business with credibility → GmbH

If you want to attract investors & issue shares → AG

Visit our local Trustee and Nominee Website or contact us if you have any questions.