GmbH vs. GbR

This decision cannot be answered unambiguously with a single piece of advice; it naturally depends on the individual case. One of the most important differences is liability. While a GbR is subject to personal joint and several liability, only the company is liable in the case of a GmbH. This means that in the event of damage, only the company's assets are affected in the case of a GmbH, whereas in the case of a GbR, the individual partners are liable with their private assets. It is therefore more advisable to set up a GmbH, especially for riskier transactions. It also makes more sense to opt for the legal form of a GmbH if there are several people involved, as there is a clear regulation of who owns what and the decision-making power is also more flexible. With a GbR, all business decisions must be made jointly.

In principle, a GmbH seems to be the better choice, but the high initial costs should not be neglected. Lawyers and notaries can incur start-up costs of € 1,000 - 2,000. This means that if you have less capital available and your company does not generate too much turnover (up to €250,000), you should choose the legal form of a GbR. The larger the company and the more risky the business activity, the more likely a GmbH is to be considered.