The Unternehmergesellschaft (limited liability), also known simply as UG or Mini GmbH, was created in 2008 as a variant of the classic GmbH. This was partly because many founders had previously chosen the British Limited as their legal form, which offered a number of advantages. The UG was intended to offer an alternative in Germany, and it was very well received. The UG is a legal entity and in most cases is subject to corporation tax and trade tax.
The annual financial statements of a UG must cash app balances also be prepared in accordance with Sections 325 and 326 of the German Commercial Code (HGB). This means that a balance sheet must be drawn up, although there are a few simplifications for the UG . What is the difference between GmbH and UG? Essentially, the Unternehmergesellschaft is just a variant of the GmbH with a lower share capital. Here you can start with just one euro as share capital, which is why it is sometimes also called a 1-euro GmbH. In contrast to a GmbH, however, the share capital of an entrepreneurial company must be paid in cash.
It cannot be paid in kind, as is the case with a GmbH. Entry in the commercial register may only take place after sufficient share capital has been paid in. There are also differences in the event of a crisis, so that a shareholders' meeting must be called immediately. With a GmbH, you have more time to do this. The profits of a UG may not be distributed in full. A quarter of the annual profits must be set aside as a reserve . Once this has reached a total of 25,000 euros, the UG can be converted into a GmbH. What are the advantages of a UG?