A GmbH and a UG (limited liability) is a legal form for a company in Germany. UG is the abbreviation for Unternehmergesellschaft. It is often also referred to as a 1-Euro GmbH. In contrast to a partnership, the UG (limited liability) is a corporation. This means that the company is always liable with its “capital” (therefore also capital company) and not the partner behind it personally. As with a GmbH, the liability of the company is therefore limited to the paid-up share capital.

Advantages of a UG (limited liability company)

The advantages of founding a company in the legal form of an entrepreneurial company (haftungsbeschränkt) can be summarized as follows:

liability minimization: liability is limited to the share capital

in contrast to the GmbH, no high share capital is required

the formation costs are low

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