What are the steps to close a German GmbH?

Question from PLN, What are the steps to close a German GmbH?

Answer from AI:

Closing a German GmbH (Gesellschaft mit beschränkter Haftung), or a limited liability company, involves several steps according to German law. It’s important to note that this process can be complex and time-consuming, and it’s recommended to consult with a legal professional for personalized advice.

1. Decision to Dissolve the GmbH

The first step in closing a GmbH is making the decision to dissolve the company. This usually requires a shareholders’ resolution. According to the German Limited Liability Companies Act (GmbHG), a majority of three-quarters of the share capital is required to pass this resolution.

2. Appointment of a Liquidator

Once the decision to dissolve the company has been made, a liquidator must be appointed. This can be one of the managing directors or an external person. The liquidator’s role is to settle the company’s affairs, including paying off any debts and distributing the remaining assets to the shareholders.

3. Registration of Dissolution and Liquidation

The dissolution and the appointment of the liquidator must be registered in the German Commercial Register (Handelsregister). This is a public announcement that the company is in the process of being closed.

4. Liquidation Process

The liquidator then begins the process of liquidating the company’s assets. This includes collecting any outstanding debts, selling off assets, and paying any remaining creditors. If there are any remaining funds after all debts have been paid, these are distributed among the shareholders.

5. Final Deregistration

Once the liquidation process is complete, the liquidator must prepare a final account and report for the shareholders. After approval, the liquidator can apply for the company to be deregistered from the Commercial Register.

Please note: The entire process can take several months to a few years, depending on the complexity of the company’s affairs. It’s also important to consider potential tax implications, so consulting with a tax advisor may be beneficial.

6. Legal Obligations

Even after the company is deregistered, former shareholders and directors may still have certain legal obligations. For example, they may be required to keep company records for a certain period of time.

This is a general guide and does not cover all possible issues that may arise when closing a GmbH. It’s strongly recommended to seek legal advice to ensure all legal requirements are met. The Federal Ministry of Justice and Consumer Protection provides resources that may be helpful.