23.03.2022, English Articles

New possibilities for online incorporation & notarization

Draft bill establishes further online options for German companies

An article by Fiona Schönbohm, attorney at law in Germany

Even in Germany, justice moves with progress - slowly, but still. Our new government is doing its best to meet the expectations placed in it with regard to the digital transformation and thus promote the so-called "innovation location Germany" that is on everyone's lips. Well then. What the so called traffic light coalition now wants to change, we briefly present in this article.

Previously: Online formation of german GmbH & UG finally possible

Since last year, the online formation of a GmbH has finally become possible in Germany. The long-awaited development, even though many German politicians have taken it upon themselves to do so, is actually - once again - thanks to the European legislator.

The European Digitalisation Directive (DiRUG, 2019/1151/EU), which provides for the online formation of companies such as the GmbH and the UG, has long since been implemented and lived reality in other European countries. In fact, Germany is (once again) bringing up the rear when it comes to implementing European requirements in national law.

New law: contributions in fixed assets to share capital possible

Until now, however, the online formation of a GmbH in german law has only been possible if the necessary share capital is provided in the form of money (so-called cash formation). When founding a GmbH, EUR 25,000 of share capital must be contributed.

In contrast, the so-called non-cash foundations (fixed assets), i.e. the contribution of objects with a corresponding value for the formation of the GmbH, were not possible online until now. This is to be changed by the new draft bill.

According to this, contributions in kind for the online formation of a GmbH will also be possible in the future. However, objects whose transfer must be notarized are excluded. These include real estate and land. For these, online formation would still not be possible in Germany.

Previously: Online notarizations for commercial register

The options for online notarization are also to be expanded. Up to now

  • merchants,
  • corporations and
  • their branches

can already have applications to the commercial register certified by video under german law. This means that they no longer need to visit a notary, which was previously necessary.

Reform: expansion of online certification

The new draft provides for two significant extensions of these online certifications.

  1. In the future, all legal entities are to have the possibility of online notarization, instead of only merchants and corporations as before.
  2. It will also be possible to certify amendments to the articles of association, eg. the partnership agreementonline, instead of only applications to the commercial register, as was previously the case.

These far-reaching changes will often save many people the trouble of going to a notary in the future.

Conclusion: Overdue innovations become reality

The drafts are welcomed by the business community. Going to the notary in person is certainly an antiquated requirement in this day and age, and its reform was sorely needed.

Especially companies with shareholders in different locations or even abroad will save a lot of time in the future and be able to manage their undertakings more effectively. It is to be hoped that not too much time will pass between the draft bill and the entry into force of the law.

UPDATE: On April 19, 2022, the German Federal Cabinet approved the draft bill to supplement the regulations implementing the Digitalization Directive.