Notary Requirement (Germany)

TL;DR

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

German company law (GmbHG §15) requires almost every change to a GmbH or UG share capital — issuances, transfers, capital increases, share-class amendments — to be witnessed by a German Notar (a state-licensed civil-law notary), recorded in a notarial deed (Urkunde), and filed with the Handelsregister. The notary's fee scales with the deal value (capped at the 'Notarkostentabelle' rates), typically running €1k–€5k for routine cap-table events and €10–30k+ for large priced rounds.

This friction is the main reason German startups use VSOPs (cash-settled phantom options) instead of real share grants for employees, structure secondary sales as bundled events to amortise notary fees, and prefer GmbH over UG for venture rounds despite the higher capital requirement. Cross-border investors are often surprised that a small bridge round in Germany costs notary fees that simply don't exist in a Delaware C-Corp.

Worked example

A €4M Series A into a Berlin GmbH incurs ~€18k in notary fees: ~€12k for the round documentation (capital increase, amended Articles, shareholder agreement), ~€4k for the post-closing PSC/Handelsregister filing, and ~€2k for an associated VSOP allocation board resolution.

Common pitfalls

• Forgetting to budget notary fees in a small bridge round and watching them eat 10%+ of the round size.
• Trying to grant employee share options as real shares (incurring per-grant notary fees) instead of VSOPs.
• Closing on a date when the notary isn't available — German closings hinge on notary calendar more than US closings.

When this shows up in a pitch deck

Not in the deck itself, but a recurring line item in the German Series A use-of-funds breakdown ('legal & notary: €40k').

Related terms

• GmbH — Standard German limited-liability company: ≥€25k share capital (half paid in at incorporation), notarised formation. Default for German VC startups.
• 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.
• Term Sheet — A non-binding document outlining the principal terms of a proposed financing, used to align investor and founder before legal documents are drafted.

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