What are the necessary steps to wind down a German company?
If the shareholders (Gesellschafter) of a German limited liability company (Gesellschaft mit beschränkter Haftung, in short: GmbH) decide that they no longer have any use for this company, the German GmbH cannot simply be struck from the company register (Handelsregister) right there and then.
Instead, in order to protect the creditors, suppliers and employees of said German limited liability company, German company law (Gesellschaftsrecht) requires the shareholders and management of the company to go through a process of winding down the company. More specifically, the process of dissolving a german GmbH is regulated in sections 60 to 77 of the German Limited Liability Companies Act (GmbH Gesetz), which is available here in an English language version.
Please note that this article does not deal with the issue of companies which are in financial distress. The procedure to wind down a bankrupt German company are entirely different. See here for more details on German company insolvency law.
The main steps of the “regular” winding down of a (solvent but no longer needed) German company are this:
- valid shareholder resolution to dissolve the company (Auflösungsbeschluss)
- official publication of said dissolution (Publikation)
- liquidation phase of at least 12 months from date of publication (Liquidierung) during which all debts are paid
- cancellation and deregistration from the German company register
A detailed explanation of the process (albeit in German language) is available here.
In case you require assistance with German business or corporate law, the German corporate law experts of Graf & Partners will be happy to advise. Visit our website or write to email@example.com
For more on German business and corporate law see these posts:
- How to read a German Company Register Extract
- Company Forms in Germany: An Overview
- Pitfalls of German Contract Law and German Company Regulations (Part 1)
- Pitfalls of German Contract Law (Part 2)
- 3 Ways to Expand Your Business to Germany
- Establish a German Limited Company (GmbH): FAQ and Checklist
- What is a GmbH? The German Limited Liability Company explained
- What is a German “Mini GmbH” or “Unternehmergesellschaft”
- Checklist: Formation of a German Company. And then what?
- Buying a German Company: A quick Checklist
- When Starting a German Business: Don’t Forget the Trade Register Notification
- 10 Things to do when starting a German Business