Starting a UG: The Ultimate Checklist for Your Entrepreneurial Company
The dream of owning your own company is within reach—especially with the entrepreneurial company (UG), a modern and flexible legal form that is ideal for founders and small businesses. But how do you navigate the start-up process safely and ensure that your UG is built on a solid legal and financial foundation?
This article supplements our article on what you need to start a UG.
This comprehensive checklist, created with expertise and up-to-date information, will help you master all the necessary steps and successfully launch your UG. You will benefit from our in-depth knowledge and the practical services offered by beglaubigt.de, which simplify and accelerate the entire process.
Why establish a UG? The advantages and disadvantages in detail
The UG (limited liability) is more than just a cost-effective alternative to the GmbH. It offers a number of advantages that make it the ideal legal form for many company founders:
- Low start-up costs and flexibility: Compared to a GmbH, the start-up costs for a UG are significantly lower. You save on both notary fees and commercial register entry fees. In addition, the UG offers a great deal of freedom in terms of corporate structure and decision-making structures, which can be a great advantage, especially in the early stages of a company.
- Limited liability and risk minimization: As with a limited liability company (GmbH), as a shareholder you are only liable for your investment and not for your private assets. This means that your private assets are protected in the event of insolvency. This feature of limited liability significantly minimizes entrepreneurial risk and offers you, as a founder, important security.
- Growth potential and conversion options: The UG is an excellent basis for your company's growth. You can convert your UG into a GmbH at any time in the future if your business expands and you need more capital. This flexible transition allows you to make the most of the advantages of both legal forms and adapt your company to your specific needs.
- Seriousness and recognition: Although the share capital is lower than that of a GmbH, the UG is recognized as a serious legal form and conveys trust to your business partners and customers. You benefit from the positive reputation of a corporation, making it easier to establish business relationships and secure financing.
- Tax advantages: The UG is subject to corporate income tax, which in certain cases can offer tax advantages over a partnership. However, it is advisable to seek individual advice from a tax advisor in order to analyze the tax implications for your company in detail.
Disadvantages of a UG: What you should bear in mind
In addition to the numerous advantages, there are a few aspects you should consider when founding a UG:
- Reserve formation: The UG is legally obliged to allocate 25% of its annual profits to reserves until the share capital reaches €25,000 and the UG can be converted into a GmbH. This may limit the funds available for investments or profit distributions.
- Image and financing (situational): In some conservative industries or with certain business partners, the UG may appear less established than a GmbH due to its low minimum share capital. This can potentially affect creditworthiness. A solid business plan and a professional presentation are crucial to overcoming this image.
- Administrative costs: Like any corporation, the UG involves certain administrative costs, e.g., for preparing annual financial statements and complying with accounting requirements.
It is important to weigh these aspects against the advantages and consider whether the UG is the right legal form for your company. Individual consultation can help you make the best decision.
Setting up a UG step by step: Your path to your own company
Starting a UG requires careful planning and following a bunch of steps. Our checklist will walk you through the whole process and make sure you don't forget anything important:
- The business idea and business plan: A sound business idea is the basis of every successful start-up. Develop a detailed business plan that outlines your goals, strategies, target audience, marketing approaches, and financial planning. A well-thought-out business plan not only serves as a roadmap for your business, but is also crucial for potential investors and business partners.
- Choosing your partners: Decide whether you want to start the UG on your own or look for partners. A joint start-up can offer many advantages, such as shared responsibility, complementary skills, a larger network, and a broader wealth of experience. However, you should proceed carefully when choosing your co-shareholders and ensure that you share the same goals, values, and ideas about corporate management.
- Drafting the articles of association: The articles of association are the foundation of your UG and should therefore be drafted with the utmost care. They regulate all essential aspects of the company structure, such as the distribution of shares, the rights and obligations of the shareholders, the management, the distribution of profits, the rules for shareholders' meetings, and much more. A well-drafted articles of association is crucial for smooth business operations and can prevent future conflicts.
- Our tip: When drafting the articles of association, seek advice from an experienced lawyer or notary to ensure that all legal requirements are met and your individual needs are taken into account.
You can also use the sample contracts and templates available at beglaubigt.de to create a professional and legally compliant contract.
For further information, please read the following: Steps for founding a UG - Notarization: The articles of association and the appointment of the managing director must be certified by a notary.
Our tip: Use the service provided by beglaubigt.de to arrange a notary appointment online and complete the entire process digitally (you can easily start here with your GmbH formation). This saves time and effort and allows you to schedule appointments flexibly.
- Payment of share capital: The minimum share capital of one euro must be paid into a business account belonging to the UG. Make sure that the account is in the name of the UG and not in your private name. The payment of share capital is important evidence for the commercial register and should therefore be carefully documented.
- Registration with the commercial register: The notarized documents are submitted to the relevant commercial register. Processing can take several weeks. Once the documents have been checked, your UG will be registered and thus acquire legal capacity. From this point on, you can conduct business and conclude contracts on behalf of your UG.
Further registrations and formalities:
Tax registration: Register your UG with the tax office immediately to obtain a tax number and fulfill your tax obligations. You will need to provide information about your business activities, expected turnover, and profits. Ensure that you meet the deadlines for filing tax returns to avoid possible penalties.
Business registration: If your UG engages in commercial activities, you must register it with the Trade Licensing Office. Business registration is subject to a fee and must generally be done in person. Please note that certain activities may require special approval.
Employers' liability insurance association: Depending on your industry, you may need to register with the relevant employers' liability insurance association. This serves to protect your employees from accidents at work and occupational illnesses. Membership of an employers' liability insurance association is usually mandatory for companies with employees.
Insurance: Find out about necessary insurance policies, such as business liability insurance or professional liability insurance. These protect your company from financial risks and give you security in your day-to-day business. Depending on your industry and activities, other insurance policies such as contents insurance, legal protection insurance, or cyber insurance may also be advisable.
Data protection: As an entrepreneur, you are responsible for protecting personal data. Ensure that you comply with the General Data Protection Regulation (GDPR) and implement appropriate data protection measures in your company.
Costs of founding a UG: transparency for your financial planning
The start-up costs for a UG are manageable and consist of various components:
- Notary fees: Notary fees are based on the value of the transaction and the scope of the notary's services. You can generally expect to pay between €150 and €300. At beglaubigt.de, you will receive a transparent overview of the notary fees incurred and can pay them directly online.
- Court fees: Court fees are incurred for entry in the commercial register, which may vary depending on the state. They usually amount to between €100 and €200.
- Other costs: These may include costs for consulting, creating sample protocols, bank fees, and any necessary translations of documents. It is advisable to research these costs in advance and include them in your financial planning. Additional costs may arise for creating a website, purchasing office equipment, or marketing measures.
beglaubigt.de provides you with a transparent overview of the costs involved and supports you in the financial planning of your UG start-up. Use our handy cost calculator to get an accurate idea of the total costs.
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Establish a UG with beglaubigt.de: Your partner for a smooth start
Starting a UG can seem complicated, but with the right help, it's totally doable. beglaubigt.de offers a bunch of services to make it easier for you to start your own business:
- Online notary appointment: Book your notary appointment conveniently online and save time. Our network of experienced notaries is available to you nationwide. We offer flexible appointments and short waiting times. Learn more about our online service.
- Personalized advice: Our experts are available to answer your questions and help you make the right decision. We offer a free initial consultation to discuss your individual needs and create a customized start-up plan.
- Professional contract drafting: Create your articles of association quickly and securely with our template. Our intuitive contract generator guides you step by step through the process and ensures that your articles of association are legally compliant and tailored to your individual needs.
- Financing: Consider how you want to finance your UG. Equity capital, loans, or subsidies—there are various options you should explore. A detailed financial plan will help you determine your capital requirements and develop the right financing strategy.
- Choosing a location: The right location can be crucial to the success of your UG. Consider factors such as proximity to your customers, availability of skilled workers, infrastructure, and rental costs. A thorough location analysis will help you make the best choice.
- Marketing and sales: Develop a marketing and sales strategy to successfully position your products or services on the market. Use various channels such as online marketing, social media, print advertising, or trade fairs to reach your target group and attract new customers.
- Networking: Build a network of contacts who can help you establish and grow your UG. This includes other entrepreneurs, industry experts, consultants, potential investors, and customers. A strong network can open doors and provide valuable support.
From UG to GmbH: Growth with prospects
A major advantage of the UG is the option to convert it into a GmbH at a later date. If your company grows and you are able to raise more share capital, the GmbH offers further advantages:
- Higher reputation: A limited liability company enjoys a higher reputation in the business world and can facilitate access to new business partners and sources of financing.
- No obligation to create reserves: Unlike with a UG, you are not required to allocate 25% of the annual surplus to reserves with a GmbH.
- Expanded financing options: A limited liability company (GmbH) offers you more options for raising capital, e.g., by issuing shares.
The transition from a UG to a GmbH is a relatively straightforward process, which is usually carried out with the assistance of a notary. If you are considering this step, we would be pleased to advise you on the requirements and procedure.
UG start-up checklist - UG start-up
To help you keep track of everything when setting up your UG, we have put together a handy checklist for you:
Phase 1: Preparation
- [ ] Develop a business idea and create a business plan
- [ ] Find shareholders (if desired)
- [ ] Draw up a partnership agreement (with legal assistance if necessary)
Phase 2: Notarization
- [ ] Arrange a notary appointment (online via beglaubigt.de)
- [ ] Have the articles of association and appointment of managing directors notarized
- [ ] Deposit share capital into the UG's business account
Phase 3: Entry in the commercial register
- [ ] Submit notarized documents to the commercial register
- [ ] Wait for the UG to be registered and obtain an extract from the commercial register
Phase 4: Further formalities
- [ ] Register with the tax office and apply for a tax number
- [ ] Register your business (if you are engaged in commercial activities)
- [ ] Check registration with the employers' liability insurance association
- [ ] Take out necessary insurance policies
- [ ] Implement data protection regulations
Phase 5: Start business operations
- [ ] Rent or set up business premises
- [ ] Hire employees (if necessary)
- [ ] Launch marketing and sales activities
- [ ] Organize bookkeeping and accounting
New: Beglaubitet.de supports you throughout the entire process of setting up your company: Set up a limited liability company (GmbH)
We support you with notarization, contract drafting, and all other steps.
This checklist provides you with a clear roadmap for founding your UG. It ensures that you don't forget anything important and that your company gets off to a successful start. Find out here how long it takes to found a UG.
Conclusion: Your UG – a step into the future
Starting a UG is an exciting journey that opens up many opportunities. With the right preparation, planning, and support, you can successfully navigate the start-up process and put your company on the path to success.
Use our comprehensive checklist to ensure that you consider all important aspects and rely on the expertise of beglaubigt.de to make your UG start-up a complete success. We accompany you from the initial idea to registration in the commercial register and beyond.
Let's lay the foundation for your entrepreneurial future together!
