The AG (Aktiengesellschaft)
or public limited company
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
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.