UG company formation costs: A comprehensive guide
The company formation of an Unternehmergesellschaft (UG) is an attractive option for many founders who wish to limit their liability with a small amount of start-up capital. In this article, we take a detailed look at the costs of UG companycompany formation and give you valuable tips on how to proceed.
Introduction
If you want to set up a UG, it is important to keep an eye on the costs. The formation costs of a UG can vary greatly depending on individual needs and the services selected. In this article you will learn everything you need to know about the costs of UG companycompany formation.
What is a UG?
The Unternehmergesellschaft (haftungsbeschränkt), or UG for short, is a special form of GmbH. It is often referred to as a "mini-GmbH" and enables founders with limited capital to choose a form of company with limited liability. The UG requires a minimum share capital of just one euro.
Costs of UG-companycompany formation
Share capital
The share capital of a UG can theoretically be as little as one euro. In practice, however, a higher capital is advisable in order to be liquid from the outset. An amount of at least EUR 500 is usually recommended, as many notaries accept this as the minimum amount for company formation .
Notary fees
A notary is required for the company formation of a UG. The notary fees consist of the costs for notarization of the articles of association and entry in the commercial register. Typical costs for the notary are between 150 and 750 euros, depending on whether you use a model protocol or individual articles of association.
Commercial register entry
The entry of the UG in the commercial register incurs additional costs of around 150 euros. There is also an additional 50 euros for the online retrieval of the extract from the commercial register.
Other start-up costs
In addition to the costs already mentioned, there are other items that can be incurred when company formation a UG:
- Legal fees: 100 - 500 Euro
- Preparation of articles of association (for individual articles of association): 300 - 1,000 euros
- Opening a business account: 0 - 100 euros (depending on the bank)
Running costs of the UG
Accounting and annual financial statements
The accounts of a UG must be kept properly and annual financial statements must be prepared at the end of the financial year. The costs for a tax consultant to prepare the annual financial statements can be between 800 and 2,000 euros, depending on the complexity of the bookkeeping and the amount of turnover.
Trade tax and corporation tax
The UG is obliged to pay trade tax and corporation tax. Corporation tax is 15% on the profit, plus a 5.5% solidarity surcharge on the corporation tax. Trade tax varies depending on the municipality and is between 7% and 17%.
Publication obligations
The UG must publish its annual financial statements in the Federal Gazette. This incurs costs of around 30 to 50 euros per year.
Advantages of UG-companycompany formation
The UG offers some decisive advantages over other company forms:
- Low share capital: With a minimum share capital of one euro, the UG is attractive for many founders with limited financial resources.
- Limitation of liability: Liability is limited to the company's assets, which protects the shareholders' private assets.
- Flexibility: The UG can easily be converted into a GmbH if the company grows and the required share capital of EUR 25,000 is reached.
- Image: Despite the low share capital, the UG often enjoys a higher reputation as a corporation than partnerships such as the GbR or OHG.
Disadvantages of UG-companycompany formation
In addition to the advantages, there are also some disadvantages that you should be aware of when company formation a UG:
- Strict formation of reserves: The UG is obliged to allocate 25% of its annual surplus to a statutory reserve until the share capital of EUR 25,000 is reached.
- Limited creditworthiness: Banks and business partners may have less confidence in the UG due to its low share capital.
- Administrative costs: The ongoing costs for bookkeeping, annual financial statements and publication obligations are often higher than for partnerships.
Process of UG-companycompany formation
Step 1: Planning and preparation
Before you start with the company formation your UG, you should draw up a detailed business plan. This should include your business idea, target group, market analysis, financial planning and marketing strategy. A well-thought-out business plan will not only help you with the company formation, but also with convincing potential investors and partners.
Step 2: Choosing the company name
The company name of your UG must be unique and distinguishable. It must not be misleading and must not infringe any existing company names. A check with the commercial register and the Chamber of Industry and Commerce can help to avoid legal problems.
Step 3: Articles of association and notary
Draw up the articles of association that regulate the legal basis of your UG. This must be notarized by a notary. You can either use a sample protocol or create individual articles of association if your UG requires specific regulations.
Step 4: Entry in the commercial register
Once the articles of association have been notarized, the UG must be entered in the commercial register. This step is necessary to legally establish the UG and make it legally capable of doing business.
Step 5: Business registration
Register your UG with the relevant trade office. The costs for business registration are usually between 20 and 60 euros.
Step 6: Opening a business account
A separate business account is required to clearly separate your UG's finances from your private assets. Depending on the bank, opening a business account can be free or subject to a fee.
Step 7: Registration with the tax office and IHK
After registering your business, you must register your UG with the tax office and the Chamber of Industry and Commerce (IHK). The tax office will assign you a tax number, which you will need for all tax matters.
Tips for cost optimization
- Use the sample protocol: Use the inexpensive sample protocol if your UG does not require any special regulations.
- Compare offers: Obtain several offers from notaries and tax advisors to find the best conditions.
- Do your own bookkeeping: If you have sufficient knowledge, you can do the bookkeeping yourself and thus save costs.
- Use subsidies: Find out about possible subsidies and grants for start-ups in order to receive financial support.
Frequently asked questions (FAQ)
Question: What is the minimum amount of share capital a UG must have?
Answer: The share capital of a UG must be at least one euro, but in practice at least 500 euros is recommended.
Question: What notary fees are incurred for the company formation of a UG?
Answer: The notary fees for the company formation a UG are usually between 150 and 750 euros, depending on the complexity of the articles of association.
Question: Are the start-up costs tax-deductible?
Answer: Yes, the start-up costs can be deducted as business expenses for tax purposes.
Question: How high are the running costs for the bookkeeping of a UG?
Answer: The costs for bookkeeping and annual financial statements by a tax consultant are usually between 800 and 2,000 euros per year.
Question: What are the most important taxes that a UG has to pay?
Answer: A UG must pay corporation tax (15% + 5.5% solidarity surcharge) and trade tax (7% - 17%, depending on the municipality).
Question: How long does the company formation a UG take?
Answer: In the best case scenario, it takes around three to four weeks to set up a UG, but this can vary depending on the processing time of the commercial register and the notaries.
Question: Can a UG later be converted into a GmbH?
Answer: Yes, a UG can be converted into a GmbH at any time as soon as the share capital of EUR 25,000 is reached. This requires a notarized conversion resolution and a corresponding entry in the commercial register.
Question: What are the advantages of a UG over a GbR?
Answer: The UG offers a limitation of liability to the company's assets, whereas with the GbR the partners are liable with all their private assets. In addition, the UG often enjoys a higher reputation as a corporation.
Conclusion
The company formation of a UG offers a cost-effective way to run a limited liability company. Nevertheless, founders should carefully calculate the various costs incurred and plan for sufficient liquidity to ensure a successful start. With the right preparations and careful planning, the UG can be an ideal solution for many business models.
