Articles of association (GmbH)
Articles of association (GmbH) / Gesellschaftsvertrag
August 12, 2024
The articles of association lay the foundation for a German limited liability company (GmbH). It sets the course for a business to be successful by defining the framework conditions for the company's life. Thorough drafting and adaptation to the individual needs of the shareholders can avoid conflicts and ensure long-term success.
Minimum content
Every articles of association must contain the following essential elements upon its formation, § 3 I Limited Liability Companies Act (GmbHG), otherwise the company will not be entered in the commercial register, § 9c II GmbHG, and will therefore not come into existence.
Company´s business name and registered office, § 3 I No.1 GmbHG
The company´s business name is the name that individualizes the GmbH in legal transactions. It should be noted that the name must contain a generally understandable addition to the legal form (e.g. "GmbH"). The registered office is the company's principal place of business. By stating this, the company can be found by creditors and the registry court.
Purpose of the company § 3 I No.2 GmbHG
To give the public an insight into the company's main activities, the purpose of the company must be stated. Colorless, non-descriptive descriptions are not sufficient for this. The focus of the activity must be clearly stated, i.e. at least the line of business and the type of activity must be specified.
Amount of the share capital, § 3 I No. 3 GmbHG
The share capital is the amount to be paid in by the shareholders* as a contribution. This sum is subject to a special regime for raising and maintaining capital, which is the counterpart to the limited liability of a company. The amount of the share capital must be stated in a precisely quantified amount in euros. This must be at least EUR 25,000 in the case of a GmbH, § 5 I GmbHG and at least EUR 1 in the case of an Unternehmergesellschaft (UG), § 5a I GmbHG.
Number and nominal value of the shares, § 3 I No. 4 GmbHG
The share is the equity interest in the share capital allocated to the individual shareholder. A specific nominal value of at least one euro must be set for each share, which establishes the obligation to make a contribution. The sum of the nominal values of all shares must correspond to the share capital, § 5 III 2 GmbHG. Shareholders may also acquire several shares, § 5 II 2 GmbHG, whereby the nominal values of these shares may diverge, § 5 III 1 GmbHG. The shares and contribution obligations of the shareholders must be allocated individually, so that the names and addresses of the persons taking over the shares must also be included.
Optional content
Although optional provisions are not necessary for entry in the commercial register, they must be recorded in the articles of association in order to be effective vis-à-vis the company. The law thus gives the founders the opportunity to add to or deviate from specific provisions. However, the corresponding entry in the articles of association is mandatory. These optional provisions are in particular
- Limitation of the company, § 3 II GmbHG
- Fringe benefit obligations of the shareholders, § 3 II GmbHG
- Contributions in kind, §§ 5IV 1, 19 II GmbHG
- Determination of further company documents, § 12 S.2 GmbHG
- Transfer restrictions, § 15 V GmbHG
- Obligations to make additional contributions, §§ 26 ff GmbHG
- Distribution of profits, § 29 I 1, III 2 GmbHG
- Redemption of shares, § 34 I GmbHG
- Regulations regarding the managing director §§ 35 II 1, 37 I, 38 II GmbHG
- Rights of the shareholders, § 45 II GmbHG
- Appointment of a supervisory board, § 52 I GmbHG
- Requirements for amendments to the articles of association, § 53 II 2 GmbHG
- Authorized capital, § 55a GmbHG
- Regulations on winding up, §§ 60 I NR.2, II GmbHG
- Regulations on liquidation, §§ 66 I, 72 S.2 GmbHG
It is recognized that, in addition to these specific provisions, other deviations and additions to the standard articles of association of the GmbH may also constitute optional provisions in the articles of association.
Non-genuine content
The minimum content and the optional provisions form the material or genuine content of the articles of association. The formal or non-genuine content of the articles of association must be viewed separately from this. Although such provisions can be included in the articles of association, they are not subject to the special regulatory provisions of the articles of association. The distinction is therefore of key importance for the interpretation of the provisions, the legal consequences of breaches of duty, the form of their amendment and the legal effect vis-à-vis the shareholders. As a general principle, it can be stated that those provisions that relate to the fundamentals of the company, the relationship with the shareholders and the legal status of the executive bodies, and therefore constitute the character of the company, are to be classified as genuine articles of association. Non-genuine articles of association include, in particular, provisions on the rights and obligations of external third parties, informational announcements and simple shareholder resolutions.
Form of the articles of association
The articles of association must be notarized and must be signed by all shareholders, § 2 I 1 and 2 GmbHG. The notarization requirement covers the minimum content as well as the optional content of the articles of association. Formal defects lead to the annulment prior to registration in accordance with § 125 of the German Civil Code (BGB), although there is the possibility of confirmation in accordance with § 141 BGB. If the company is entered in the commercial register despite a breach of form, the formal defect is thereby cured.
Formation via video-link
There is the possibility of "online formation" for the GmbH, § 2 III GmbHG. This is intended to provide a further formation alternative and thus make formation easier. This "online formation" takes place via a video link between the shareholders and the notary, thus saving the trip to the notary. This is only permitted via the video communication system operated by the German Federal Chamber of Notaries. It should be noted that this option is only available for cash incorporation.
Amendments to the articles of association
Amendments and additions to the articles of association prior to registration also require the corresponding formal requirements as actus contrarius, i.e. notarization and signature by all shareholders. After registration, however, a qualified and notarized shareholders' resolution is required to amend the articles of association, § 53 GmbHG.
*If we use the generic feminine or the generic masculine in the future for better readability, this expressly includes all genders.