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					          The AG (Aktiengesellschaft)

           or public limited company


General Introduction
Article 1 of the German Public Limited Companies Act (AktG) defines an AG as a company where “only the
company’s assets are liable to creditors for liabilities of the company and where the capital is divided up into shares.”



How Aktiengesellschaft (AG) Work
Partners: Originally, an AG had to have a minimum number of five shareholders. Meanwhile, the so-called German
Deregulation Act (Gesetz für kleine Aktiengesellschaften und zur Deregulierung des Aktienrechts) has modified this
condition by authorising the establishment of a single-member public limited company. Pursuant to the 12th Council
Directive (EEC) on single-member private limited companies, it is subject to the obligations of a single-member limited
company. This is a special feature of German law.
To become a partner, it does not play a role whether your status is merchant or non-merchant. Partners are not held
liable personally for the company’s debts. They are liable to the extent of their contributions.

Administration: An AG consists of 3 management bodies:
    The general shareholders’ meeting (Hauptversammlung) ;
    The executive board (Vorstand): If the nominal capital amounts to more than 3 million marks, the executive board
    consists of at least two natural persons, in all other cases a single person is sufficient.
    The supervisory board (Aufsichtsrat): It consists of employee and shareholder representatives who are elected by
    the general meeting. It is composed of a minimum of 3 natural person members in companies where the capital
    amounts to less than or equals 3 million marks. This number shall increase to 9 or 15 whenever the capital is
    between 3 and 20 million marks. If this amount is exceeded, the supervisory board shall consist of at least 21
    persons.

Capital: Since 01/01/99, the nominal capital must amount to at least 50,000 euros (divided up into shares or bonds, each
share must have a minimum nominal value of 1 euros, values greater than this should be a multiple of 5). On formation
of the company, at least one quarter of the capital must be paid up. There is no set maximum value.

Taxation: An AG is subject to corporate tax. While French companies are subject to a single tax rate of 33.3%,
companies with a registered office in Germany are subject to a dual tax rate: 40% on undistributed (retained) earnings
and 30% on distributed earnings.

An AG may do a public offering and may be listed at the stock exchange.

				
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posted:9/24/2011
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