Public limited company (AG)

A “public limited company” in Germany is known as an “Aktiengesellschaft” (AG). Here are the key characteristics and details about AGs:

1. Legal Structure:

An AG is a legal entity that is commonly used for large corporations and businesses in Germany. It is a type of stock corporation, and its ownership is represented by shares (Aktien).

2. Share Capital:

Unlike some other legal forms, AGs require a substantial amount of share capital. As of my last knowledge update in September 2021, the minimum share capital required to establish an AG is €50,000. Shareholders purchase shares in the company, and this capital forms the financial foundation of the corporation.

3. Ownership and Shareholders:

AGs can have a large number of shareholders, and their shares are generally freely transferable. Ownership in an AG is determined by the number of shares an individual or entity holds.

4. Board of Directors:

AGs are managed by a board of directors (Vorstand), typically composed of executive directors responsible for the company’s day-to-day operations. There is also a supervisory board (Aufsichtsrat) that oversees the management board’s activities and is responsible for appointing and dismissing executive directors.

5. Corporate Governance:

AGs in Germany are subject to stringent corporate governance regulations, and they are often required to follow the principles of good corporate governance. This includes transparency, accountability, and fairness in decision-making processes.

6. Reporting and Auditing:

AGs must maintain proper accounting records and prepare annual financial statements. These statements may require external auditing by a certified auditor, depending on the company’s size and other factors.

7. Publicly Traded:

Some AGs are publicly traded on stock exchanges, making their shares available to the public. These are referred to as “publicly listed AGs.” Others may be privately held and not listed on public stock exchanges.

8. Legal Obligations:

AGs are subject to various legal obligations and regulations, including those related to corporate governance, reporting, and taxation. They must comply with German commercial and corporate laws.

9. Taxation:

AGs are subject to corporate income tax (Körperschaftssteuer) and trade tax (Gewerbesteuer) on their profits. Shareholders may also be subject to income tax on dividends they receive from the AG.

10. Conversion:

AGs have the flexibility to convert into other legal forms or merge with other companies, subject to legal requirements and approvals.

11. Name:

The company’s name must include “Aktiengesellschaft” or the abbreviation “AG” to indicate its legal form.

12. Dissolution:

AGs can be dissolved through various means, such as shareholder resolution, insolvency, or legal action. Assets remaining after settling debts and liabilities are distributed to shareholders.