What advantages does a GmbH have compared to a GbR?
July 22, 2024 | 40,00 EUR | answered by Christian Ahlert
Dear lawyer,
my name is Gertrud Richter and I am the managing director of a small company that is currently operated as a GbR. As we would like to expand our business and attract external investors, we are considering changing the legal form to establish a GmbH. However, I am unsure if this step is really advisable and what advantages a GmbH offers compared to a GbR.
Currently, we are operating as a GbR with limited liability and can act flexibly as we do not require a minimum deposit. However, I also would like to learn about the advantages of a GmbH and weigh whether the additional effort is worthwhile. I am concerned that a GmbH could be associated with higher costs and bureaucratic hurdles that could negatively impact our business activities.
Therefore, I would like to know from you what specific advantages a GmbH offers compared to a GbR. Are there any tax benefits? What about liability? What options for capital procurement do we have as a GmbH? And what legal obligations will we face if we change the legal form?
I would be very grateful if you could help me with this decision and provide me with information on the advantages and disadvantages of a GmbH compared to a GbR. Thank you in advance for your support.
Sincerely,
Gertrud Richter
Dear Mrs. Richter,
Thank you for your inquiry regarding changing the legal form of your company from a GbR to a GmbH. It is understandable that you would like to inform yourself about the advantages and disadvantages of a GmbH compared to a GbR before making such an important decision. I will be happy to explain to you in detail the differences between the two legal forms.
In comparison to a GbR, a GmbH offers several advantages that can be particularly relevant for business expansion and attracting external investors. One significant advantage of a GmbH is the limitation of liability for the shareholders. In a GbR, the shareholders are personally and unlimitedly liable with their entire assets for the liabilities of the company. In the case of a GmbH, the shareholders are only liable with their contribution, protecting their personal assets. This can be advantageous, especially for larger investments or risks.
Another advantage of a GmbH is the ability to raise capital from external investors. Since a GmbH usually has a higher legal status and reputation than a GbR, it is often easier to convince investors to participate. Additionally, shares in a GmbH can be transferred more easily than business shares in a GbR.
From a tax perspective, a GmbH can also offer advantages. A GmbH is subject to corporate tax, which is usually lower than the personal tax rate of individuals in a GbR. Furthermore, there are various options for tax planning with GmbHs that are not possible with a GbR.
However, establishing a GmbH also involves certain costs and bureaucratic hurdles. You must contribute a minimum share capital of €25,000 and create articles of association and a statute. Additionally, as the managing director of a GmbH, you are obligated to certain duties and care obligations that may be less strict in a GbR.
Overall, a GmbH can be advantageous, especially for larger businesses with external investors and higher liability risks. On the other hand, for smaller companies that want to operate flexibly and do not plan significant investments, a GbR may be sufficient.
I recommend that you, together with your tax advisor and auditor, assess the specific advantages and disadvantages of a GmbH for your company and weigh whether the change in legal form is worthwhile. I am also available for a personal consultation to clarify your individual questions and concerns.
I hope that this information has been helpful to you and I am at your disposal for any further questions.
Best regards,
Christian Ahlert, Attorney
