Investor Guide
2026-10-10 08:26

GmbH (German limited-liability company): Why €25,000 Is a Floor, Not a Ceiling

A GmbH is a German company with its own legal personality whose creditors can look only to the company's assets — in our experience, the vehicle most international buyers of German supermarkets choose. Its €25,000 minimum capital is a floor for capitalisation, not a cap on what the company can lose, and its managing directors carry personal duties.

What it is

The GmbH has its own rights and duties and can own land in its own name (§ 13(1) GmbHG); for its debts, only the company's assets are liable (§ 13(2) GmbHG). Its articles must be notarised (§ 2(1) GmbHG), and its share capital must be at least €25,000 (§ 5(1) GmbHG). At least a quarter of each cash contribution, and €12,500 in total, must be paid in before the application for registration (§ 7(2) GmbHG). The company exists as such only once entered in the commercial register; whoever acts in its name before then is personally liable (§ 11 GmbHG). Shares pass by notarised agreement (§ 15(3) GmbHG), without any change in the land register.
Shareholders generally risk only what they put in. Managing directors, however, can be liable to the company for breaches of duty (§ 43 GmbHG) and for payments made after it became illiquid or over-indebted (§ 15b InsO). They can also be liable to the tax office for taxes left unpaid through an intentional or grossly negligent breach of duty (§ 69 AO).

Why it matters to investors

In our experience, most investors buying single stores in the €3–20 million range choose a GmbH (Part 9). It gives up the tax-free sale that private ownership allows after more than ten years (§ 23 EStG). In return it offers limited exposure, routine bank financing and shares that can be transferred, pledged or inherited without touching the land register — subject to the share-deal rules on real estate transfer tax.
Its tax profile follows from its legal form. A GmbH pays corporate income tax of 15% plus solidarity surcharge — 15.825% in total. The rate is legislated to fall by one point a year from 2028 to 10% in 2032 (§ 23 KStG). It is subject to trade tax by its legal form (§ 2(2) GewStG); its rental income is fully relieved only through the extended reduction. And "non-recourse" is a point to negotiate: for smaller companies, banks often ask for a shareholder guarantee (Part 9).

What to check

• Whether the GmbH is registered before it signs the purchase contract — until then, those acting in its name are personally liable (§ 11(2) GmbHG).
• Articles that release the managing director from § 181 BGB, so that he can sign a shareholder loan with himself (Part 9).
• The beneficial owners entered in the Transparency Register (Part 9).
• For an existing GmbH bought as a share deal, its liabilities and tax history: they stay with the company.
Related terms: Gesellschafterdarlehen · Körperschaftsteuer · Share Deal
Sources: GmbHG §§ 2, 5, 7, 11, 13, 15, 43; InsO § 15b; AO § 69; BGB § 181; EStG § 23; KStG § 23; GewStG § 2(2); Gordon Real Estate Group, "German Prime Retail", Part 9. Legal position as of 10 October 2026.
Photo: Peter Herrmann / Unsplash
This entry is general information and not legal or tax advice.