Sole proprietorship: the simplest
A registered trade (Gewerbe) costs little and has minimal formalities. The price: you are liable with your private assets, and to some B2B customers you look less robust. For smaller services and testing the market, often entirely sufficient.
The UG (haftungsbeschränkt): liability protection from 1 euro
The “small GmbH”: from 1 € capital, liability limited to company assets, but with a duty to retain 25 % of annual profit until 25,000 € is reached (then conversion into a GmbH is possible). A good interim step on a small budget — though the suffix “haftungsbeschränkt” is sometimes read in the market as a sign of weakness.
The GmbH: the market standard
With 25,000 € share capital (at least 12,500 € paid in before registration) the GmbH is the most recognised form — with banks, business partners and authorities. Formation and accounting cost more, but with real contract risk and growth plans it is usually the right choice.
Three control questions
- What risk does your business generate? (construction, transport, products = high risk → limited liability),
- Who is your customer? (large B2B customers expect a GmbH),
- Do you already have a company abroad? (then also calculate the branch office option).