As a founder, you are faced with the question of which legal form is best for your future company at an early stage in your start-up plan. This decision must be carefully considered, because it also determines, among other things, how your company can go on later and how it can develop. In recent years, a legal form has developed that has become very popular, especially for founders with little equity . We are talking about Mini GmbH .
What is a Mini GmbH?
According to usvsukenglish.com, the Mini GmbH has many different names in meaning there are no differences. You have certainly already heard of the 1-Euro-GmbH , the small GmbH and certainly also from the UG . However, the Mini GmbH is officially referred to as an entrepreneurial company (limited liability). This name was created as part of the modernization of the law in relation to the GmbH. This modernization also took place in response to the British legal form Limited . The aim was to offer founders like you in Germany an opportunity to start their career as entrepreneurs with a limited liability company.
The Mini GmbH is actually a sub-form of the well-known GmbH and you can see this from some similarities between the classic GmbH and Mini GmbH. Because of the limitation of liability with the latter, as with the GmbH, you only have to be liable with the company’s assets and not with your private assets. The biggest difference between the two legal forms can be found on the topic of equity . For the classic GmbH you have to raise a minimum starting capital of 25,000 euros . Impossible for many young founders. With Mini GmbH, on the other hand, you only need a share capital of one euro . Hence the name 1-Euro-GmbH.
The differences between Mini GmbH and GmbH
| Mini GmbH | GmbH |
| Share capital per shareholder is 1 euro | The share capital of the GmbH is 25,000 euros |
| No contributions in kind are possible in Mini GmbH | Contributions in kind can be made in the GmbH |
| At Mini GmbH there is an obligation to build up reserves every year. This is also called accumulation. | In the case of the GmbH, only the share capital has to be brought in. |
| The addition of limited liability may always be present in your company name. It looks like this, for example: Max Mustermann UG (limited liability) | The addition is not necessary for a GmbH. These are for example like this: Max Mustermann GmbH |
What are the advantages and disadvantages of Mini GmbH?
Before you decide to found a Mini GmbH, you should carefully weigh all the advantages and disadvantages. The basement is very popular, but there are also points that need to be carefully considered. The advantages and disadvantages for you at a glance.
Advantages and disadvantages of a mini GmbH
| Advantages of Mini GmbH | Description |
| Share capital | A very big advantage for you is the amount of share capital. Compared to 25,000 euros (at least 12,500 euros) with the classic GmbH, you only need to bring in one euro for the establishment of the Mini GmbH. |
| Limitation of Liability | The limitation of liability is of course a very big advantage for both Mini GmbH and classic GmbH. Even in the event of financial problems, such as bankruptcy , your private assets remain protected. Accordingly, there is liability only for the share capital of your company. |
| founding | The establishment is also a great advantage. The establishment is quick and easy with a so-called sample protocol. This not only makes the start-up faster, but also significantly more cost-effective. |
Now to the disadvantages of this type of company:
| Disadvantages Mini GmbH | Description |
| credit-worthiness | The addition of limitation of liability is not always well received by donors (e.g. banks), but also by customers or suppliers. They all know that your share capital is very low and, in the worst case, there is not much to get. This not only has a negative impact on your creditworthiness , but also on the trust you have in your company. |
| Liquidity risk | You have to pay close attention to this disadvantage. It may sound tempting to start your business for just one dollar. But you can get into a financial trap very quickly. If you only pay in one euro, there are costs, for example for start-ups or investments , that have to be covered. Very difficult to do with one euro. That is why it is advisable to deposit more. You can bring in a sum of up to 24,999 euros here. |
| Reserve obligation | The reserve requirement is to be seen as a disadvantage. There is a legal obligation for the so-called accumulation. For you, this means that you or your shareholders in Mini GmbH are obliged to set up 25 percent of the annual surplus as a reserve . However, the annual surplus must first be adjusted to allow for the loss carryforward. The retained earnings represent a kind of legally prescribed savings measure for you until a total of 25,000 euros is reached. On the one hand, this makes sense because it increases the liability amount of your Mini GmbH. On the other hand, you have to be aware that your profit will be significantly lower. |
