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German Shelf Company

Off-Counsel

April 21, 2023

TABLE OF CONTENT:

1. Introduction
2. What is a German Shelf Company?
3. Types of German Shelf Companies

GmbH
AG

4. Advantages of Acquiring a German Shelf Company
5. Disadvantages of Acquiring a German Shelf Company
6. German Shelf Companies and Share Capital
7. Bank Accounts and Financial Facilities
8. Legal Aspects of German Shelf Companies
9. How to Acquire a German Shelf Company
10. Pricing and Costs of German Shelf Companies
11. Potential Uses of German Shelf Companies
12. Tax Considerations and Implications
13. Due Diligence When Acquiring a Shelf Company
14. Choosing the Right Shelf Company
15. Conclusion
16. FAQs

Introduction

Coffee house and coffee shop are related terms for an establishment that primarily serves brewed coffee and other hot drinks. Café or cafe or caff may refer to a coffee shop, bar, teahouse, small and cheap restaurant, transport cafe, or other places to eat and drink, depending on the culture. A coffee house may have some of the same characteristics as a bar or restaurant, but different from a cafeteria.

What is a German Shelf Company?

A German Shelf Company, also known as a Firmenmantel in German, is a pre-existing, non-operational company established and registered but has not engaged in significant business activities. These companies are "shelved" and kept ready for future use, allowing new owners to bypass the lengthy and sometimes complicated process of incorporating a new company in Germany.

Types of German Shelf Companies

There are two main types of German Shelf Companies: GmbH and AG

GmbH

Gesellschaft mit beschränkter Haftung, or GmbH, is the most common form of a German limited liability company. It offers the advantage of limited liability for its shareholders and is widely used by small and medium-sized businesses.

AG

Aktiengesellschaft, or AG, is a German public limited company that has the ability to issue shares to the public. This type of company is typically used by larger corporations and offers a higher degree of flexibility in terms of share capital and shareholder structure.

Advantages of Acquiring a German Shelf Company

There are several advantages to acquiring a German Shelf Company, such as:

1

Speed
Purchasing a shelf company allows you to bypass the time-consuming process of setting up a new company from scratch, enabling you to start your business operations immediately.
2

Credibility
A shelf company with a history can potentially provide more credibility to potential partners, clients, and investors.
3

Ease of Access
A shelf company already has a registered address, bank account, and necessary legal documentation, making it easier to start business operations.

Disadvantages of Acquiring a German Shelf Company

Some potential disadvantages of acquiring a German Shelf Company include the following:

1

Cost
Shelf companies can be more expensive than setting up a new company from scratch.
2

Liability
Although rare, hidden liabilities or issues associated with the shelf company may not be immediately apparent.

DE0492

Legal form of the company: GmbH
Year of company formation: 1995
Share capital: 26.000 EUR
Bank account: Yes
Internet banking: Yes
PayPal account (Merchant account): Yes

20'000,- €

GP1004

Legal form of the company: GmbH
Year of company formation: 2011
Share capital: 25.000,00 EUR
Bank account: Yes
Internet banking: Yes
PayPal account (Merchant account): Yes

11'500, €

GP1005

Legal form of the company: GmbH
Year of company formation: 2012
Share capital: 26.000,00 EUR
Bank account: Yes
Internet banking: Yes
PayPal account (Merchant account): Yes

14'500, €

DE0507

Legal form of the company: GmbH
Year of company formation: 1984
Share capital: 50.000 EUR
Bank account: Yes
Internet banking: Yes
PayPal account (Merchant account): Yes

15'000, €

DE0355

Legal form of the company: GmbH
Year of company formation: 1990
Share capital: 76.000 DEM
Bank account: Yes
Internet banking: Yes
PayPal account (Merchant account): Yes

15'000, €

DE0204

Legal form of the company: AG
Year of company formation: 2000
Share capital: 1000.000.00 EUR
Bank account: Yes
Internet banking: Yes
PayPal account (Merchant account): Yes

355'000'00,- €

DE0464

Legal form of the company: AG
Year of company formation: 2003
Share capital: 400.000.00 EUR
Bank account: Yes
Internet banking: Yes
PayPal account (Merchant account): Yes

255'000'00,- €

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German Shelf Companies and Share Capital

The share capital of a German Shelf Company varies depending on its type (GmbH or AG) and specific characteristics. Ensuring that the company's share capital meets the legal requirements and is appropriate for your business needs is important.

Bank Accounts and Financial Facilities

German Shelf Companies typically come with a bank account, internet banking, and in some cases, a PayPal merchant account. This allows for a smoother transition when starting your business operations.

Legal Aspects of German Shelf Companies

When acquiring a German Shelf Company, it is essential to be aware of the legal aspects involved. The company must be transferred to the new owner through a notarized share purchase agreement, and the new owner must be registered with the German Commercial Register. Additionally, any changes in management, address, or other company details must also be updated in the register.

How to Acquire a German Shelf Company

The process of acquiring a German Shelf Company typically involves the following steps:

1

Identify and select a suitable shelf company that meets your business requirements.

2

Conduct thorough due diligence to ensure the company is free from liabilities and complications.

3

Engage a German notary to draft and notarize the share purchase agreement.

4

Register the change of ownership and any other necessary updates with the German Commercial Register.

5

Transfer the company's bank account and other financial facilities to the new owner.

Pricing and Costs of German Shelf Companies

The price of a German Shelf Company can vary significantly depending on factors such as its age, share capital, and legal form (GmbH or AG). It is essential to compare prices and consider the specific needs of your business when selecting a shelf company.

Expanding existing businesses into the German market.
Starting a new business venture in Germany without the hassle of setting up a new company.
Asset protection and tax planning strategies.
Facilitating mergers and acquisitions.

Tax Considerations and Implications

When acquiring a German Shelf Company, it is crucial to consider the tax implications and ensure that the company is compliant with all relevant tax laws and regulations. This may involve consulting with a tax advisor or accountant familiar with German tax law.

Due Diligence When Acquiring a Shelf Company

Performing thorough due diligence is critical when acquiring a German Shelf Company. This includes checking the company's history, financial records, liabilities, and potential legal issues. Engaging the services of a professional due diligence provider or legal advisor can help ensure a smooth acquisition process.

Choosing the Right Shelf Company

Selecting the right shelf company depends on your specific business needs and goals. Factors to consider include the company's age, legal form, share capital, and the presence of a bank account and other financial facilities. It is essential to weigh the pros and cons of each option and consult with professionals to make an informed decision.

Conclusion

In conclusion, a German Shelf Company can be an attractive option for businesses seeking to enter the German market or expand their existing operations. Understanding the various aspects involved is crucial, as conducting thorough due diligence and choosing the right company ensures a successful acquisition and seamless transition into your new business venture.

FAQs

A GmbH is a limited liability company typically used by small and medium-sized businesses. At the same time, an AG is a public limited company used by giant corporations and can issue shares to the public.