The type of business you start will determine which legal form is best for you (for example, a freelancer chooses a different legal form than an entrepreneur with a large start-up loan). Your local contact or a lawyer can advise you if in doubt. Another fundamental factor influencing the choice of the legal form of companies is whether the entrepreneur carries out a commercial activity or a liberal profession as a self-employed person. The Aktiengesellschaft in Deutschland (AG) is the closest to the Aktiengesellschaft (plc.). The GA is a more complex form of company for registration, and professional advice is highly recommended, whether to convert a limited liability company into a public company or to expand into the German market. Our lawyers have advised entrepreneurs and managing directors around the world on this matter. A sole proprietor is anyone who starts and operates a business alone as a one-person unit. For a sole proprietor in Germany, several legal forms are possible. Typically, there is a period of six months to a maximum of one year during which employees and employers must agree on a solution for employee participation. If no agreement is concluded within the period prescribed by law, the existing minimum legal requirements for employee participation apply.

In the case of an SE, the participation of employees of the participating legal entity which provides for the highest proportion of employees on the supervisory board or management bodies of the company shall then apply. If a public limited liability company is converted into an SE and the negotiations on employee involvement fail within the prescribed deadline, the employee participation statute applicable in the converted company remains in force and all negotiations are permanently frozen. The negotiations, which are conducted on the workers` side by a specially established negotiating body, therefore do not allow for a unilateral “way out” of the German law on employee participation. The rules on employee involvement in the SE are independent of the number of employees employed by the SE. An increase in the number of employees does not therefore lead to an increase in the proportion of employees on the supervisory board or on the management board of the SE, i.e. the influence of employees is not increased by an increase in the number of employees. Another reason for the creation of an SE is the entrepreneurial co-management of its employees, which is unique in its German form. Unless expressly provided otherwise, the SE shall not be subject to German codetermination provisions.

Rather, worker participation is negotiated. When an SE is set up, an agreement must be negotiated with the employees or their representatives, which governs in particular the operational and entrepreneurial participation of the SE. It is entirely up to the negotiating parties to exclude or not codetermination, i.e. to regulate contractually whether employee representatives should be members of the supervisory board of the undertaking or not. On this page you can find out which legal form in Germany is suitable for whom and compare legal forms such as sole proprietorship as a small company, GbR, GmbH and UG. Formation by merger shall be open only to public limited-liability companies from different Member States. The formation of an SE holding company shall be open to public limited-liability companies and limited liability companies having their registered office in different Member States or to subsidiaries or branches established in Member States other than their registered office. The creation of a joint subsidiary is open in the same circumstances to any legal person, public or private. [6] At Schlun & Elseven Rechtsanwälte, our company law specialists answer all your questions about company registration and incorporation in Germany. Our lawyers will advise you on what your German company should look like and make you aware of the risks and benefits of different business models.

Once we have established a working relationship, our experienced corporate lawyers will take care of any issues your business may have. By allowing our lawyers to take care of the paperwork, your company can focus on the other aspects of entering the lucrative German market. No separate tax law has been created for SEs, the tax laws generally applicable to companies apply. However, during the implementation of the SE Regulation in 2006, the tax laws relating to the SE were slightly amended. In addition, the introduction of the SE as a legal form has been a catalyst for changes in German conversion tax legislation that bring German tax law closer to the rest of Europe and facilitate the transfer of a company`s registered office. A compromise contained in the Directive was worked out as follows: the provisions on employee involvement in the SE were decided by negotiation between the employees and management before the SE was set up. If no agreement can be reached, the provisions of the Directive shall apply. The Directive provides for employee involvement in the SE where a minimum percentage of employees in undertakings forming an SE benefit from provisions on employee participation.

The Directive allows Member States not to transpose these provisions on employee involvement into their national law, but no SE may be set up in that Member State if the provisions of the Directive apply and negotiations between employees and management are unsuccessful. The European legislator has created a regulatory framework for the SE, the SE Regulation (SE Regulation). The SE Regulation applies directly in all EU and EEA Member States. In Germany, the implementation of European standards through SEAG and SEBG legislation entered into force on 22 December 2004. This legal system is complemented by the applicable subordinate national legislation, in particular the Companies Act. The share capital of the SE is divided into shares and must amount to at least EUR 120,000. As a full-service law firm, we advise companies in areas of law such as German employment law, intellectual property law, competition and antitrust law as well as contract drafting and enforcement. You can become self-employed in Germany as a sole proprietorship, partnership or company. The choice of legal form in Germany when setting up a company depends on various factors such as start-up capital or liability. The GmbH (Gesellschaft mit beschränkte Haftung) is the most common limited liability company in Germany and the German equivalent of a limited liability GmbH.

Our legal advisors advise founders in Switzerland and abroad on company registration and ensure that the process is handled properly. By identifying potential pitfalls and leveraging their years of experience, our lawyers aim to ensure that the registration process is carried out efficiently. The Regulation is supplemented by the Council Directive supplementing the Statute for a European company with regard to the involvement of employees (informally “Council Directive on employee participation”), adopted on 8 October 2001. [8] The Directive lays down rules on the involvement of employees in the management of the SE. The Statute provides for four ways to set up a European company[5]: National information on the expansion of your business in another EU country. An SE may be formed only in accordance with the forms of establishment (or numerus clausus) laid down in the SE Regulation. The SE Regulation provides for four main forms of formation of an SE: An SE established in Germany is a novelty in terms of the choice of an organisational structure. The SE is the only legal form in Germany which, at the time of its formation, allows a choice to be made between the “two-tier system” with separate management and supervisory bodies or the “one-tier system” with a single management and supervisory body, the administrative board. For sole proprietors, there are a number of possible legal forms with which an entrepreneur can reduce their entrepreneurial risk. The statutes of the SE must provide for the general meeting of shareholders as organs and either a management and a supervisory board (two-tier system) or a management board (one-tier system). In the two-tier system, the SE is governed by a board of directors. The member or members of the Management Board are authorized to represent the Company vis-à-vis third parties and in legal proceedings.

They are appointed and dismissed by the Supervisory Board. No one may be a member of the management board and the supervisory board of the same company at the same time. However, the supervisory board may appoint one of its members to act as a member of the management board in the event of absence due to leave. During this period, the function of member of the supervisory board of the person concerned shall be suspended. In the one-tier system, the SE is managed by a board of directors.