Solicitor for commercial and company law in Cologne

Our topics in commercial and corporate law

• Choice of legal form and business setup – GmbH, UG, GbR, KG, OHG, GmbH & Co. KG
• Articles of association – Creation, review, adaptation, succession arrangements
• Commercial Register – New registration, applications for alteration, deletions
• directors' liability – Internal and external liability, D&O, obligation to file for insolvency
• shareholder dispute – Challenge of resolutions, exclusion, Severance payment
• commercial law – Merchant status, commercial agent (§§ 84 et seq. German Commercial Code (HGB)), authorised signatory (Prokura)

Your corporate law matter – we show you the options

Whether a start-up is on the horizon, a dispute among shareholders is escalating or a change of managing director is imminent: in company law matters, commercial success usually lies in the detail. A poorly worded resolution, an overlooked requirement for approval or a miscalculated severance payment can have six-figure consequences years later. We help you to avoid these mistakes – or to rectify them if legal or commercial problems have already arisen.

Do you want to start a business?

Choosing the right legal form is the first – and frequently most consequential – decision. It influences your personal liability, capital requirements, tax burden, disclosure obligations and your attractiveness to investors. Together with you, we analyse your venture and recommend the legal form that suits your size, risk profile and capital structure. If required, we accompany the complete incorporation process – from the articles of association and notarisation to entry in the commercial register and trade registration.

Dispute amongst shareholders?

Conflicts between shareholders often escalate insidiously: first there are arguments over business strategy, then over distributions, and then over the question of who is allowed to squeeze whom out of the company. We examine the legal situation on the basis of the specific partnership agreement, outline options for action – from mediation to the process of elimination up to the appeal against the court decision – and represent you if legal proceedings ensue.

Commercial register registration or amendment necessary?

Every material change to a registered company must be filed with the commercial register: changes of managing director, relocation of the registered office, capital changes, share transfers (by submitting an updated shareholder list, section 40 GmbHG [German Limited Liability Companies Act]), changes of company name. We prepare the necessary resolutions, coordinate with the notary's office and ensure that the filing can be completed without queries from the registry court.

Have you been held personally liable as managing director?

The liability of the managing director goes far beyond what many expect. Breach of the duty of care (Section 43 GmbHG), delayed filing for insolvency (Section 15a InsO), payments made after the onset of insolvency (Section 15b InsO), unremitted social security contributions, tax liability pursuant to Section 69 AO – the potential liability risks are manifold. We examine the allegations in detail, secure evidence and defend you in civil law matters as well as against social security institutions.

Legal forms compared – which one is right for your business?

The following overview shows the most important legal forms permitted in Germany in a direct comparison. It does not replace case-by-case advice, but provides you with an initial orientation for discussions with a lawyer and tax adviser.

Note on the standard template (§ 2 para. 1a GmbHG): The simplified procedure is available for the formation of GmbHs with a maximum of three shareholders, exclusively one managing director and exclusively cash contributions. Individual arrangements are not possible. Therefore, an individual contract is often worthwhile starting from the second shareholder onwards.

I. Corporate law: from incorporation to winding-up

1. The GmbH – standard form for SMEs

The private limited company (Gesellschaft mit beschränkter Haftung – GmbH) is by far the most commonly chosen form of incorporated company in Germany. It is governed by the GmbH Act (GmbHG) and offers the decisive advantage that liability is fundamentally limited to the company's assets. The minimum share capital is €25,000 (Section 5 GmbHG). In the case of a cash formation, at least one quarter of each cash contribution and a total of at least €12,500 must be paid in prior to registration in the commercial register (Section 7(2) GmbHG). Contributions in kind must always be made in full.

What a good social contract must regulate. The contract is more than a formality – it determines how the shareholders will deal with each other when things get difficult. Key points are: company name, registered office, corporate purpose, share capital, shares, appointment and dismissal of managing directors, voting rights and decision-making, reservation of consent, withdrawal of shareholders, severance pay arrangements and succession in the event of death.

Digital startup since 2022. In accordance with section 2(3) of the German Limited Liability Companies Act (GmbHG), notarisation via video conference is possible – based on an approved video communication system provided by the Federal Chamber of Notaries. Initially permitted only for cash-based single-person formations using a standard protocol, this option has since been significantly expanded and now also encompasses multi-person formations and resolutions amending the articles of association. Certain non-cash formations are also possible online today, provided there are no other formal requirements to the contrary.

2. The UG (haftungsbeschränkt) – the little sister of the GmbH

The Unternehmergesellschaft (UG) pursuant to Section 5a of the German Limited Liability Companies Act (GmbHG) is not a distinct legal form, but rather a variant of the GmbH with a reduced starting capital from €1. As the price for this, the law provides for a statutory obligation to retain earnings: a quarter of the annual surplus, reduced by any loss carryforward, must be allocated to a capital reserve. If the capital reserve, together with the share capital, reaches €25,000, the prerequisite for a capital increase to at least €25,000 is met – meaning the UG does not automatically become a GmbH; a formal resolution for a capital increase is required. Thereafter, the company may continue to use the designation „UG (haftungsbeschränkt)“ in business transactions or change its company name to „GmbH“. For low-capital start-ups, the UG remains attractive because it provides limited liability immediately without the need to raise the full share capital.

3. GbR and eGbR following the MoPeG reform

As of 1st January 2024, the Act to Modernise Partnership Law (MoPeG) fundamentally reformed the law governing civil law partnerships (GbRs). The GbR is recognised as a legal entity and can hold real estate, trademarks and shares in its own name. A key innovation is the partnership register as an instrument of transparency: the registered GbR („eGbR“) is not a new legal form, but rather the registered variant of the GbR. Registration is generally voluntary, but becomes a practical prerequisite for certain procedures: land register entries require an eGbR (Section 47(2) of the Land Register Act (GBO)), and the acquisition of shares in a GmbH likewise regularly presupposes a partnership listed in the register (Section 40(1) sentence 3 of the Limited Liability Companies Act (GmbHG)). Real estate GbRs, investment GbRs and other GbRs with register-dependent holdings are therefore de facto reliant on registration.

4. OHG and KG – the classic commercial partnerships

The general partnership (OHG) and the limited partnership (KG) are governed by sections 105 et seq. of the German Commercial Code (HGB). In an OHG, all partners are personally and unlimitedly liable. In a KG, at least one general partner (Komplementär) is unlimitedly liable, whereas the limited partners (Kommanditisten) are only liable up to the amount of their liability contribution registered in the commercial register; once the contribution has been paid in full, direct liability towards creditors is excluded (section 171 HGB). The KG is of particular practical relevance in the form of the GmbH & Co. KG, which combines the limited liability of a private limited company (GmbH) with the tax and structural advantages of a partnership.

AG and SE – for capital intensity and international structure

The public limited company (AG) is the legal form of choice for capital-intensive projects, investor rounds involving different classes of shares, or accessing the capital market. The minimum share capital is €50,000 (Section 7 of the German Stock Corporation Act (AktG)). Unlike the private limited company (GmbH), the structure is strictly three-tiered—management board, supervisory board and general meeting—and freedom of design within the articles of association is significantly restricted (rigidity of the articles of association, Section 23(5) AktG). For companies with an international structure, the Societas Europaea (SE) offers additional options, such as for cross-border relocation of the registered office.

6. Shareholder dispute and challenge of resolutions

Conflicts within the shareholder group are among the economically riskiest situations for a company – not infrequently they paralyse business operations before a solution is found. Classic points of contention are the appropriation of profits, the appointment and dismissal of managing directors, reservation of consent, the admission of new shareholders and exclusion for good cause.

Legally, several instruments are available: the action for annulment against invalid resolutions (by analogy with §§ 241 et seq. of the German Stock Corporation Act (AktG) in the case of a limited liability company (GmbH)), which declaratory action on the validity or nullity of a resolution, the exclusion suit against the disruptive shareholder and the Application for cancellation as a last resort. The outcome almost always depends on what the partnership agreement stipulates in detail—blanket answers do not help here. The relevant jurisdiction depends on the registered office and the subject matter of the dispute; in contentious company law proceedings, the Regional Court (Landgericht) sitting as a commercial chamber is regularly responsible.

7. Director's liability – held personally liable

The personal liability of the managing director of a GmbH is one of the most frequently underestimated areas of company law. An overview of the most important grounds for liability:

• Internal liability pursuant to Section 43 of the GmbHG (German Limited Liability Company Act): The managing director owes the company the diligence of a prudent businessman; breaches of duty lead to liability for damages.
• Delayed filing for insolvency pursuant to section 15a of the German Insolvency Act (InsO): In the event of insolvency or over-indebtedness, the petition for insolvency must be filed without undue delay. The frequently cited three or six weeks are statutory maximum periods and not „safe“ waiting periods – according to case law, there is regularly an obligation to act much earlier, as soon as the prospects of restructuring have been examined.
• Payments after insolvency maturity (§ 15b InsO): As a matter of principle, the managing director must reimburse the company for any payments made out of the company's assets after the onset of illiquidity or over-indebtedness. In practice, this claim for reimbursement is at least as relevant as traditional liability for delayed filing for insolvency.
• Unpaid social security contributions: Failure to remit employee contributions is a criminal offence under Section 266a of the German Criminal Code (StGB); under civil law, the managing director is personally liable.
• Tax liability pursuant to Section 69 of the German Fiscal Code (AO): For unremitted taxes, in particular PAYE and VAT, the managing director can be held personally liable as the legal representative.
• Company name without legal form: Anyone who operates in legal transactions without using the legal form suffix „GmbH“ (Section 4 GmbHG) may expose themselves to a liability by apparent legal authority suspend; whether and to what extent personal liability arises depends on the individual case.

II. Commercial law: the special rules for merchants

The Commercial Code (HGB) is the special law governing merchants. Anyone operating as a merchant is subject to stricter rules than an „ordinary“ contracting party under the Civil Code (BGB) – for example regarding the binding nature of offers, commercial letters of confirmation, the duty to inspect and notify of defects pursuant to Section 377 of the HGB, and the obligation to keep accounting records.

1. Who is a merchant?

A merchant is anyone who operates a commercial enterprise (§ 1 HGB). Any commercial establishment is deemed a commercial enterprise unless the business, by its nature and scope, does not require a commercially organised business operation (so-called. small businessAnyone who is not already a merchant by operation of law can voluntarily have themselves entered in the commercial register (merchant by registration, section 2 of the German Commercial Code (HGB)). Capital companies such as a GmbH are always commercial companies by virtue of their legal form (section 6 of the HGB).

2. Commercial power of attorney and general commercial power of attorney

Procuration (§§ 48 et seq. HGB) is the most extensive power of representation in commercial law. As a matter of principle, an authorised signatory (Prokurist) can conduct all legal transactions, both in and out of court, associated with the operation of a commercial business – with the exception of the sale and encumbrance of real estate (which requires explicit extension).

Important: Commercial power of attorney arises as soon as it is granted by the proprietor and is effective in both internal and external relations. Registration in the commercial register is required by law (§ 53 HGB), but the entry has only declaratory, not constitutive. The revocation must also be registered. In addition to commercial power of attorney (Prokura), there is the less extensive general commercial mandate (§ 54 HGB), which does not require registration.

3. Commercial agent law (§§ 84 et seq. German Commercial Code (HGB))

The commercial agent arranges business transactions for another company or concludes them in its name. The central – and, in the event of a dispute, economically explosive – issue is the compensation claim of the commercial agent under § 89b of the German Commercial Code (HGB), which may arise upon termination of the contract. The amount of the claim is limited to an average annual commission of the last five contract years (maximum limit), and the actual amount is determined by a separate calculation. The claim is legally mandatory and cannot be excluded prior to the termination of the contract.

Practically decisive is the limitation period from one year after the end of the contract (§ 89b(4) sentence 2 HGB): Within this period, the commercial agent must assert the claim assert – unlike with normal limitation periods, it is not enough to assert the claim at a later date. We examine the amount, requirements and compliance with the forfeiture period for both parties – commercial agents and companies alike.

4. Commercial Register – Registration, Amendment, Deletion

The commercial register is a public directory maintained for companies and merchants subject to registration requirement. The publication effect pursuant to Section 15 of the German Commercial Code (HGB) is the core of commercial register law: what is registered must be accepted by legal transactions; what should have been registered but has not been generally cannot be asserted against third parties. Missing or delayed applications are correspondingly risky.

Processes requiring registration include, among others:

• Incorporation, relocation of registered office, change of company name, dissolution, removal of the company from the register
• Appointment, removal and modification of the representation authority of managing directors and management board members
• Granting and revocation of commercial power of attorney
• Corporate actions: increase, reduction, conversion of reserves
• Mergers, demergers, transformations pursuant to the Transformation Act

Share transfers in a GmbH are not entered as a register amendment. Pursuant to Section 40 of the GmbH Act (GmbHG), an updated list of shareholders must instead be submitted to the commercial register. It is only this list that proves shareholder status in legal transactions.

The official register is available online at handelsregister.de.

5. Business registration (§ 14 GewO)

In accordance with Section 14 of the Trade Regulation Act (GewO), the commencement of an independent commercial enterprise must be notified to the competent authority – at the latest upon taking up the activity. In Cologne, this is done at the Public Order Office. The registration triggers automatic notifications to the tax office, the statutory accident insurance institution, and the Chamber of Industry and Commerce (IHK) or the Chamber of Skilled Trades. If the registration is missing, fines of up to €1,000 under Section 146 GewO as well as tax and social security disadvantages may be incurred. Freelancers under Section 18 of the Income Tax Act (EStG) are exempt from trade registration.

III. Share transfer, transformation and business succession

Businesses are rarely static. Shares are sold, inherited, gifted or transferred as part of succession planning. Legal forms are changed, companies merged or demerged. All these processes are subject to comparatively strict formal regulations in Germany – and mistakes are expensive.

Transfer of shares in a GmbH

Both the contractual obligation to transfer a GmbH share (the purchase agreement) and the in rem act of transfer (the assignment) require notarisation (§ 15 paras 3 and 4 GmbHG). A „handwritten“ share purchase agreement is initially void for lack of form. However, the formal defect can be cured by the subsequent assignment being notarised (§ 15 para 4 sentence 2 GmbHG). Anyone relying on this nevertheless incurs a considerable risk – immediate notarisation is always to be preferred.

The transfer only becomes effective vis-à-vis the company upon entry of the acquirer in the newly submitted shareholders' list (Section 16 (1) GmbHG). The list is submitted to the commercial register (Section 40 GmbHG) – the share acquisition itself is not a commercial register entry.

Conversion under the Transformation Act

The Transformation Act (UmwG) governs mergers, divisions, asset transfers and changes in legal form. Typical use cases include the merger of several companies into one, the carve-out of a business division into a subsidiary, or the conversion of a GmbH into an AG (for example, prior to an initial public offering). Each of these processes follows its own procedural rules, has tax implications and is frequently associated with significant approval requirements.

Business succession

Succession planning is a corporate, inheritance and tax law task. Crucial courses of action are set in the partnership agreement: succession clauses, qualified succession clauses, continuation clauses and severance pay arrangements determine what happens to the shares in the event of death.

Important for partnerships: Since the MoPeG reform, the statutory default rule upon the death of a partner is no longer the dissolution of the partnership, but rather the departure of the deceased partner with the continuation of the partnership by the remaining partners (§ 723 BGB for the GbR, § 130 HGB for the OHG). Dissolution only occurs if the partnership agreement expressly provides for it. Without a clear rule, however, the process remains prone to conflict – for example regarding the amount of the payout and continuation rights.

Costs and process - transparent and comprehensible

Legal advice should provide clarity, not additional uncertainty. Before taking on your case, we will inform you of the expected costs and, where appropriate, work on a fixed-fee or hourly rate basis rather than billing solely in accordance with the RVG.

Free initial assessment – and initial consultation within the meaning of Section 34 of the RVG

Two terms that are frequently confused:

• Free initial assessment: An initial, non-binding consultation to assess your situation and the appropriate next steps. This is an offering from our law firm and not a legally mandated service.
• Initial consultation under section 34 RVG: Only with actual legal advice does a claim for remuneration arise. Without a divergent fee agreement, the fee for an initial consultation with a consumer (§ 13 BGB) is capped at a maximum of €190 net (§ 34 para. 1 sentence 3 RVG); for more comprehensive advice or a written opinion, the upper limit is €250 net. There is no statutory cap for corporate clients.

How much does advice on commercial and company law cost?

The legal basis is the Lawyers' Compensation Act (RVG). The amount of the fees depends on the Object value – and thus to the economic interest in the matter. In the formation of companies, this frequently corresponds to the share capital, in share transfers to the purchase price, and in shareholder disputes to the value of the shares in dispute.

Note: The exact fee depends on the amount in dispute, the scope of the work, the stage of the proceedings and, where applicable, a fee agreement. We will discuss the expected costs before taking on the mandate. Since 1 June 2025, following the 2025 Costs Amendment Act (KostBRÄG 2025), value-based fees have increased by around six percent; the €190 and €250 limits for consumer advice have remained unchanged.

Cover under legal protection insurance

Pure company and commercial law disputes are as a rule not covered by standard legal protection insurance. Exceptions are special commercial legal protection insurance policies and contract law modules. We will check for you whether your policy applies and, upon request, handle the request for cover.

How the collaboration works

1. Free initial assessment. Brief overview of your situation and the next logical steps – by phone or email.
2. Appointment. Clarification of the scope of the assignment, costs and estimated duration. Written power of attorney.
3. Legal review and strategy. Analysis of the documents (articles of association, resolutions, correspondence), examination of the legal situation, development of the strategy for action.
4. Implementation. Drafting of contracts, notarial appointment, negotiation with the opposing party, and, where applicable, legal enforcement.

Tieben Law Firm – Your contact for commercial and corporate law

The law firm Tieben, based at Sachsenring 34 in the Südstadt district of Cologne, advises and represents clients in civil and commercial law matters. We advise entrepreneurs, managing directors, shareholders and commercial agents – preferably from Cologne and the Rhineland, as well as international clients with German corporate connections.

Dedicated contact person

Your contact person for commercial and corporate law is Lawyer Helmer Tieben. Mr Tieben has been admitted to the Cologne Bar Association since 2005 and holds an LL.M. (International Tax) from the University of Melbourne. Upon request, we also handle matters in English – an advantage for foreign investors and founders setting up or holding a company in Germany.

Personalised support instead of mass processing

You will be assigned dedicated contact persons, and can expect transparent communication and prompt responses. No ticketing system, no passing you between departments – you know who you are speaking to and the exact status of your instruction.