Social security obligation for managing directors of a Ltd...
November 30, 2009 | 30,00 EUR | answered by FP Fischer Robert Fischer
I am a managing director in a GbR and have been privately insured for health and pension for over 8 years.
I now intend to establish a Ltd. as well. As a director or managing director of the Ltd., would I have to pay social security contributions in addition to income tax?
Dear inquirer,
First of all, thank you for your inquiry, which I would be happy to answer based on the information provided and in the context of your involvement in an initial consultation. The response is based on the description of the situation. Missing or incorrect information about the actual circumstances can affect the legal outcome.
As the sole shareholder and managing director of a corporation (limited, GmbH or UG), you are exempt from social security contributions. Therefore, only income tax, solidarity surcharge, and possibly church tax are deducted from your managing director's income.
For your information:
Have you ever considered the alternative to the Ltd., the new German entrepreneurial company (limited liability)? This is generally preferred over the Ltd. nowadays, as it is much easier to handle and has approximately the same start-up costs. I am available for consultation on this topic.
I hope this information has given you a sufficient overview of the situation and remain
Yours sincerely,
Robert Fischer
Dipl.-Betriebswirt (BA)
Tax consultant
