What is the difference between a GmbH and a UG in Germany?
A GmbH is Germany's standard limited liability company, requiring a set minimum share capital fixed in law. A UG, sometimes called a mini-GmbH, is a variant of the same legal form that can be started with a lower share capital and must retain part of its profit until it reaches the GmbH threshold.
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How it works
Both forms are created by notarised formation documents and entry in the commercial register, and both give shareholders limited liability. A UG converts into a full GmbH once its capital, built up through retained profit, reaches the statutory minimum.
Commonly mixed up with
A UG is sometimes described as a separate legal form from a GmbH. It is legally a GmbH with a lower starting capital requirement and an obligation to build reserves.
What is the difference between a GmbH and a UG in Germany?
| Knowledge, Berlin | Business and finance |
|---|---|
| Short answer | A GmbH is Germany's standard limited liability company, requiring a set minimum share capital fixed in law. A UG, sometimes called a mini-GmbH, is a variant of the same legal form that can be started with a lower share capital and must retain part of its profit until it reaches the GmbH threshold. |
| How it works | Both forms are created by notarised formation documents and entry in the commercial register, and both give shareholders limited liability. A UG converts into a full GmbH once its capital, built up through retained profit, reaches the statutory minimum. |
| Commonly mixed up with | A UG is sometimes described as a separate legal form from a GmbH. It is legally a GmbH with a lower starting capital requirement and an obligation to build reserves. |
| Last reviewed | 2026-08-08 |
Short questions
- Do both need a notary?
- Yes, formation documents for both forms require notarisation.
- Is liability limited in a UG?
- Yes, shareholder liability is limited as in a full GmbH.
- Must a UG convert eventually?
- It converts once accumulated reserves reach the GmbH capital threshold.
- Are both entered in the same register?
- Yes, both are recorded in the commercial register.
- Where is current guidance published?
- IHK Berlin publishes guidance on choosing a legal form.
Sources
More in this track
- What is Gewerbeanmeldung and who needs it?
- What is the difference between a German tax ID and a VAT number?
- How does corporate tax work for a company in Germany?
- What social contributions apply when hiring an employee in Germany?
- What is the difference between a Freiberufler and a Gewerbe in Germany?
- What is the Handelsregister and which businesses must join it?
- What is needed to open a German business bank account?
- What decides office and coworking costs in Berlin?
- What must a valid business invoice in Germany contain?
These pages explain how the rules work and link the authority that owns them. They are not legal, tax or immigration advice, and amounts and thresholds change, so open the source before you act.
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