Rule of thumb: you pick a UG for lack of €12,500, not for love. If the capital exists, the GmbH saves the later conversion and negotiates better.
UG or GmbH: the Price of Admission
GmbH: €25,000 share capital (€12,500 paid in at founding). UG: from €1, but with a mandatory profit reserve. The choice is market signal plus maths.
✓ Verified: 18/07/2026
WHAT TO DO
AUTHORITY
Gewerbeamt / Ordnungsamt
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› Details and tips
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Max recommends:
Between sole proprietorship and UG one question decided: what happens when sued. Personal liability ended the debate — 300 € of founding costs versus sleepless nights.
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Lea recommends:
The permit nuance: anyone can be a shareholder with any residence title, but as a salaried managing director check BEFORE the notary whether your title allows self-employment.
FREQUENTLY ASKED QUESTIONS
Can I found alone? ▾
Yes, the one-person GmbH is everyday practice: you are shareholder and managing director at once. The model protocol covers this case too.
Does a UG with 1 € capital look unserious? ▾
For service businesses and starts: no — the liability shield is identical. Downsides: the duty to save a quarter of profits up to 25 000 €, and less trust from banks. Upgrading to GmbH is possible later.
Is the €25,000 frozen? ▾
No — it is working capital: after registration it funds the business (equipment, rent, salaries). It is locked only between deposit and the commercial-register entry.
Do I need a capital company at all — or is a sole proprietorship enough? ▾
Limited liability costs bureaucracy (balance sheets instead of simple accounting, disclosure, ~€1,500–3,000/year for accounting). With small risks, starting solo is often smarter — see our self-employment route.