New minimum share capital for limited liability companies

Until the end of last year, the minimum share capital of a limited liability company was € 35,000, half of which, i.e. € 17,500, had to be paid in cash. However, to facilitate the formation of a limited company, it was already possible under the previous legal situation to form a limited company with less equity. For the first ten years of the company's existence, a so-called founding privilege could be claimed.
The share capital of a limited company with formation privileges only had to amount to € 10,000, of which at least half, i.e. € 5,000, had to be paid in cash. After the first ten years, however, the articles of association had to be amended and the share capital increased to € 35,000; the amount actually paid in had to be € 17,500, as in the case of the non-privileged limited company. As a result of the current changes to the law, the formation of a limited liability company with formation privileges is now obsolete.

New legal situation

The Company Law Amendment Act has generally lowered the minimum share capital for a limited liability company to €10,000, meaning that the required cash contribution is €5,000. This makes it much easier to raise capital when founding a limited liability company, which is intended to promote new companies in particular. In many cases, this could also potentially lead to a reduction in notary fees, as the notary fee depends on the amount of the share capital of the company in question. The reduction in the minimum share capital also has an impact on the minimum corporation tax, which is calculated at 5% of the statutory minimum share capital and is therefore reduced from €1,750 to €500 per year. The previous regulations, according to which the minimum corporation tax is reduced to € 500 per year for limited liability companies founded after June 30, 2013, will therefore apply to all limited liability companies in future. For a limited liability company with formation privileges, a further advantage of the change in the law is that it is no longer necessary to increase the share capital to € 35,000 after the ten-year period has expired, as its share capital now meets the general minimum requirements anyway.

Notice

An existing reference in the commercial register to the privileged formation of a limited liability company remains in place without further action by the shareholders despite a change in the law. There is no termination of the formation privilege due to the passage of time. If the shareholders wish that the formation privilege is no longer visible in the commercial register, an amendment to the articles of association must be made, whereby the provisions on the formation privilege set out therein must be removed, which must be filed with the commercial register. The capital contributions of the shareholders may remain unchanged. An appeal to creditors does not have to be made due to the lack of a reduction in the liability fund.