[Translate to fr:] If a company wants to be present in Germany mainly to initiate business and maintain contacts with business partners, credit institutes or government offices, the establishment of a representative office is the first and easiest step. The personnel, financial, and organizational expense is relatively low. Depending on requirements, it is enough to establish a representative office with one or several employees.
The establishment of a representative office in Germany by a foreign company only requires approval in exceptional cases. For example, representative offices of foreign banks that aim to independently initiate or conduct business with domestic customers require the approval of the bank supervisory authorities.

[Translate to fr:] Anyone wanting to start up immediately is advised to establish a sole proprietorship. This is the easiest way of forming a company, because special formalities such as deeds of partnership or minimum capital are not required. An entry in the commercial register as a registered business person (eingetragener Kaufmann, e.K.) is only necessary if the annual turnover is more than EUR 260,000.00 and the profit is over EUR 25,000.00. Of course, as a sole proprietor you have full liability for the debts of your business.

[Translate to fr:] A civil law association is often formed to launch a business idea together with others. This form of company is a type of partnership because at least two partners agreed to establish the company. The partners are liable with their private assets for debts incurred by the company. Written articles of association are recommended on the formation of a GbR but are not compulsory.

[Translate to fr:] The general partnership (OHG) is the classic form for medium-sized and larger companies. Every GbR whose purpose is to run a commercial enterprise, that is a business enterprise of a type or size that requires business operations to be set up in a commercial way, automatically qualifies as an OHG.

An OHG is required to register with the trade licensing office and be entered in the commercial register. The accounting regulations for an OHG are also stricter than those for a GbR.

[Translate to fr:] The limited partnership (KG) is a legal form related to the OHG, but with the options of limiting liability for some of the partners. In the KG, at least one partner (the general partner) is personally liable without limitation. The liability of the other partners (the limited partners) is limited to their monetary contribution. Like an OHG, a KG must be registered with the trade licensing office and be entered in the commercial register. The most important advantage of a KG over an OHG is the greater flexibility offered by the option of being able to increase the capital base by including additional limited partners.

[Translate to fr:] A GmbH and KG can be combined to create a GmbH & Co. KG, a special form popular because it minimizes the liability risk. However, because of its basic structure as a KG, this form is a partnership, not a corporation. In this combination, though, a GmbH – whose liability is limited to the paid in capital – acts as the personally liable general partner of the KG.

[Translate to fr:] The partnership company is specifically for the joint exercising of professional freelance activities. Mere capital participations are therefore excluded. This form of company enables members of the same or different freelance professions to join forces to form a mutually profitable company. As a result, a number of different professional services can be offered from a single company. The personal liability of the partners can be excluded with regard to professional errors for which other partners alone were responsible.

[Translate to fr:] Corporations are the alternative to partnerships. The company bears liability, because as the result of the establishment of a corporation, a legal entity is formed with its own rights, obligations, and name. The company itself concludes contracts, possesses assets, and must pay taxes. Liability is limited to the business assets. A minimum capital is required, and the accounting obligations are more extensive than those for partnerships.

[Translate to fr:] The limited liability company (GmbH) is the most popular legal form among the corporations, as it combines high flexibility with relatively few obligations. The GmbH is established through the articles of association. For a GmbH to be established successfully, a notary must certify the articles of association and the entry of the GmbH in the commercial register. One individual person can establish a GmbH. The transfer of shares has to be notarized.

To set up a GmbH, minimum capital of EUR 25,000.00 is required, which can also be made up of non-financial assets. At the time of registration, however, it is sufficient for half of the minimum capital, i.e. EUR 12,500.00, to be actually and verifiably contributed. In the case of property, documents must be attached to the application verifying that the value of the property actually corresponds to the specified counter value of the contribution.

For 2008 the government has planned a reform on GmbH-law. The flexibility of the legal form shall be increased. Especially, it is planned to lower the minimum capital on EUR 10,000.00.

[Translate to fr:] Stock corporation (Aktiengesellschaft, AG) offers two main advantages:

1. Shares can be transferred easily.
2. The AG can be listed publicly on the stock exchange. The equity base can hence be raised publicly and extended without difficulty.

Furthermore, the AG enjoys a high market reputation among business partners.

However, the founding formalities and costs of an AG are relatively high and the AG is subject to extensive organizational obligations in day-to-day business.
Establishing an AG

In principle, any person can establish an AG.

An AG must have a minimum share capital of EUR 50,000, which must be fully subscribed by the founding shareholders. The articles of association must be certified by a notary.

The AG comes into existence upon registration in the commercial register. The application must be signed by the founding shareholders, the members of the supervisory board, and the management board before a notary. In addition, an AG must be registered with the local trade office.

The founding shareholders appoint the first auditor and supervisory board (Aufsichtsrat), which in turn appoints the first management board (Vorstand). The appointment of the first auditor and supervisory board must be notarized.

The founding shareholders must also prepare a formation report with the relevant details of the establishment of the AG. This report has to be scrutinized by the boards.

The AG is managed by its management board. Neither supervisory board nor shareholders can exercise direct influence on the management board.