Comparison of the "Gesellschaft mit beschränkter Haftung", the "British limited company" and the "Societas Privata Europaea"

Seminar Paper , 2010 , 11 Pages , Grade: 3,0

Didactics for the subject English - Pedagogy, Literature Studies

My personal conclusion is that all these three forms of organization have advantages and disadvantages for nearly everyone who might be interested in incorporate a business. On the one side the GmbH could be used for every business and it is proven. But you need not less than 25.000 € to start your business under this legal structure.
Moreover the Limited is also proven, but there is the problem that you need a registered office probably far away from your generally business location. But the advantage of this legal structure is that there is no need to have any initial capital.
The SPE is maybe a great legal structure but nobody could know this because it is not tested. The idea of this form of organization in my opinion is a quite good brainchild.
Now it depends on you, than all these legal structures are for capital companies and they are generally used for low and mid-level business. The most important fact is that your responsibility is limited.

1 Introduction

1.1 Way of looking at the problem

At first I will point out the basics, the advantages and the disadvantages of the Gmbh. After that I describe the basics of the British limited company and demonstrate the organization, the advantages and the disadvantages. Then I am going to show the basics and the fundamentals of the Societies Privata Europea.

Finally I point out the similarities and the difference between these 3 types of legal structure.

1.2 Ambitions

My ambition is to point out the best way to found a company and to organize this one. Moreover I try to confront these types of companies and discuss for anyone who might be interested to incorporate a company in Germany or maybe in Great Britain.

2.1 Gesellschaft mit beschränkter Haftung

The GmbH is a capital company with his own entity and he is only responsible with the investment in the business.

2.1.1 Fundamentals

The GmbH will be founded if one or more persons conclude and sign the company agreement and the constitution. A notary is needed to certify this. The capital contribution of the shareholders builds the share capital of the business. The GmbH can acquire property, sign contracts and suit by law. All the shareholders of the company are only liable with deposits.^[1]

2.1.2 Foundation

The foundation of a GmbH starts with a before foundation company. In this time they start to develop the company agreement. Moreover to found a GmbH you need one or more persons and at least 25.000 €. To register that business into the commercial register you need 12.500 € as minimum deposit. You have two choices two found such kind of company. The first one is a so called “Bargründung” and the other one is the so called “Sachgründung”. The first way is very easy, because all you need is money, which means every shareholder pays without material. The second way is more complicated because every material which the shareholders try to fetch needs to ballpark.

A GmbH is founded after the entry in the commercial register.^[2]

2.1.3 Advantages

One advantage of the GmbH is that you can use this kind of legal structure for generally everything.

- For a business in the production
- For the trade business
- Or for every kind of service

You have also the opportunity to use this legal structure for freelance work, for artwork or for research purposes.

The most important is probably the limitation of liability. Furthermore an important advantage is the opportunity to work in your own business for money. Last but not least the fiscal hedge is significant.^[3]

2.1.4 Disadvantages

One disadvantage of this legal structure is maybe the difficulties in the separation between the company assets and the personal assets. One other drawback is the probably high seed capital. Moreover you have to document all, which means a total documentation between the shareholders and the company activities. Then there is the need to publish your annual closure and your profit and loss account every year. Last but not least you can only quit your business with a formal resolution.^[4]

[...]

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^[1] http://de.wikipedia.org/wiki/Gesellschaft_mit_beschr%C3%A4nkter_Haftung

^[2] http://www.foerderland.de/405.0.html

^[3] http://www.iyotta.de/index.php/gmbh/108-gmbh/437-gmbh-vor-und-nachteile.html

^[4] http://www.iyotta.de/index.php/gmbh/108-gmbh/437-gmbh-vor-und-nachteile.html

• College: AKAD University of Applied Sciences Leipzig
• Grade: 3,0
• Author: Steve Brause (Author)
• Publication Year: 2010
• Pages: 11
• Catalog Number: V173763
• ISBN (eBook): 9783640942015
• ISBN (Book): 9783640942251
• Language: English
• Tags: GMBH, limited, societas Privata europaea