Abstract

In the following chapter, we will present the German corporate form ‘limited liability company’ (Gesellschaft mit beschränkter Haftung, GmbH). We will start with a basic introduction, outline the general characteristics of a GmbH, provide a short historical overview, as well as present recent developments (in particular the company law revision of 2008) and discuss some advantages of the GmbH as a business vehicle. After a discussion of the legal requirements and procedure of establishing a GmbH, including the newly introduced simplified procedure using standard templates and the alternative company form of the ‘entrepreneurial company’(Unternehmergesellschaft, UG), we will outline the internal organization of aGmbH,explainingthecompetenciesandfunctioningofitscorporatebodies.FollowingadetaileddiscussionofthedutiesandresponsibilitiesofaGmbH’smanaging director, as well as the most important liability risks, we will turn to the statutory and contractual mechanisms available for protecting minority shareholders, giving several examples of common provisions in the articles of associate, which areusedforthispurposeinpractice.Wewillconcludeourpresentationwithabrief outline of the grounds and procedure for dissolution and liquidation of a GmbH.