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Brexit and the Limited: Why establishing a UG now makes even more sense

The Limited in 1999

Many German founders decided to found an English limited company in 1999. This was the one at that time the only optionto found a limited liability company in Germany without a capital contribution i. H. v. To generate 12,500 or 25,000 € (or 25,000 / 50,000 DM). The need for it existed through that At that time there was no German legal form of company. The UG - as the “little sister” of the GmbH - was only introduced later.

The ECJ as a pioneer

The way for the Limited in Germany, however, only paved the way for the ECJ with its decision on the freedom of establishment.

Resourceful founders in Germany tried to register the branch of an English limited company in Germany - which was initially refused. I.In 1999, however, the ECJ ruled:

"A Member State that refuses to register a branch of a company that has been legally established in another Member State in which it has its registered office, but does not develop any business activity, violates Articles 52 and 58 of the EC Treaty if the branch to enable the company to carry out its entire business activity in the country in which this branch is established without establishing a company there and thus circumventing the local law on the establishment of companies, which places higher demands on the payment of the minimum share capital. "

The ECJ made it possible to operate a limited company in Germany. This was justified with the European freedom of establishment.

The BGH also recognized EU law and awarded the Limited liability limitation

The BGH has approved this connected and decided:

"The liability of the managing director for legal obligations of a private limited company founded in accordance with the Companies Act 1985 in England with actual administrative headquarters in the Federal Republic of Germany is based on the law applicable at the place of its establishment."

This enabled German founders - based on the European freedom of establishment - Establish a limited company without using a large amount of share capital.