How to Register a UG in Germany — Your Company from €1

A limited liability company from one euro of share capital — that's the UG (haftungsbeschränkt), commonly called the "mini-GmbH". Since its introduction in 2008, it has been the most popular legal form for startups on a small budget. This guide shows how the formation works, what it costs, and where the pitfalls are.

What is a UG?

Legally, the Unternehmergesellschaft is a GmbH variant: own legal personality, limited liability, notarized formation. The difference is the capital — instead of €25,000, €1 is theoretically enough.

The legal trade-off: the UG must retain 25% of its annual profit as reserves until it reaches the GmbH share capital of €25,000. Then it can (but doesn't have to) convert into a GmbH.

Registering a UG: step by step

1. Draft the articles of association

For standard formations with up to 3 shareholders there's the model protocol (Musterprotokoll) — it combines articles, director appointment, and shareholder list in one document and significantly reduces notary fees.

2. Notary appointment

As with the GmbH, notarization is mandatory. The notary then files the UG with the commercial register.

3. Deposit the share capital

The chosen share capital (practical recommendation: €500–1,000, not €1) is deposited into the business account. Important: for a UG the capital must be paid fully in cash — contributions in kind are not allowed.

4. Commercial register entry and trade registration

After registration (1–3 weeks), the trade registration and tax office registration follow.

What does a UG formation cost?

| Item | Cost | |---|---| | Share capital | from €1 (recommended: €500–1,000) | | Notary (model protocol) | approx. €300–600 | | Commercial register | approx. €150 | | Trade registration | €10–65 | | Ongoing: accounting/taxes | depending on scope, from ~€1,000/year |

Can I register a UG as a foreigner?

Yes — there are no nationality or residency restrictions for shareholders. In practice you need:

• a business address in Germany (required for the commercial register) — bookable digitally with Clevver
• a business bank account for the capital deposit — the biggest hurdle for non-EU citizens; remote banking solutions help
• possibly a notary appointment with apostille/certified translation if you don't want to travel

More details in our guide Starting a business in Germany as a foreigner.

UG vs. GmbH vs. sole proprietorship

| | UG | GmbH | Sole proprietorship | |---|---|---|---| | Minimum capital | €1 | €25,000 | none | | Liability | limited | limited | unlimited | | Reserve requirement | 25% of profit | none | none | | Perception | solid | strong | neutral | | Formation cost | ~€500–800 | ~€800–1,500 | ~€30 |

Pros and cons of the UG

In favor:

• Limited liability without large starting capital
• The full legal framework of a corporation
• A clear growth path to the GmbH

Against:

• "UG (haftungsbeschränkt)" must always be written out — some business partners read it as a sign of thin capitalization
• The reserve requirement slows down profit distributions
• The same administrative duties as a GmbH (balance sheet, annual statements, corporate tax)

Bottom line

The UG is the cheapest path to a limited liability company in Germany — ideal for validating a business idea. If you're targeting investors or larger contracts from day one, the GmbH is often the better fit. You'll find all legal forms compared in our company types guide.