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    DE · Germany

    GmbH

    Also called: Gesellschaft mit beschränkter Haftung, German limited liability company

    TL;DR

    Standard German limited-liability company: ≥€25k share capital (half paid in at incorporation), notarised formation. Default for German VC startups.

    The Gesellschaft mit beschränkter Haftung (GmbH) is Germany's default corporate form for VC-backed startups. Incorporation requires at least €25,000 of share capital (Stammkapital), with at least €12,500 paid in cash before registration, a notarised founding deed (Gesellschaftsvertrag), entry in the local Handelsregister, and tax registration with the Finanzamt.

    Unlike a Delaware C-Corp, every cap-table change, share issuances, transfers, option allocations, must be done before a notary, which adds friction and cost (€1 to 5k per round depending on transaction size). For that reason German founders often hold a UG first and convert to GmbH at Series A, or use VSOPs (Virtual Stock Options) instead of real shares for employee incentives.

    Worked example

    Two Berlin co-founders incorporate a GmbH with €25,000 share capital (50/50), pay in €12,500 in cash, sign the founding deed before a notary (~€1,200 in fees), and register with the local Amtsgericht's Handelsregister within 4 weeks, total formation cost ~€2,500 all-in.

    Common pitfalls

    • •Underestimating notary fees that scale with transaction value, a €10m round can incur €15 to 30k of notary costs.
    • •Trying to issue real shares to employees instead of using VSOPs and paying the notary every time.
    • •Forgetting that German VAT/tax registration is separate from Handelsregister entry.

    When this shows up in a pitch deck

    Founders mention 'XYZ GmbH, registered in Berlin (HRB 123456)' on the Company slide; the structure also drives the use of VSOPs on the Cap Table slide.

    Related terms

    UG (haftungsbeschränkt)

    'Mini-GmbH' German form founded with as little as €1 capital but must retain 25% of profits annually until €25k, then convert to a full GmbH.

    AG (Aktiengesellschaft)

    German stock-corporation form (€50k min capital, two-tier board) used for IPOs and large companies but considered too rigid for venture rounds.

    VSOPs (Virtual Stock Options)

    Cash-settled phantom-share grants used by German GmbHs to give employees economic equity exposure without notarisation costs of issuing real shares.

    Notary Requirement (Germany)

    German law requiring share allotments, transfers, and capital changes in a GmbH/UG to be witnessed by a notary, adding €1 to 5k per cap-table change.

    Founder

    A person who started or co-started the company and (typically) holds founder common stock subject to founder vesting.

    Use GmbH in your next pitch deck

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