Abstract:
The German legislators undertook the biggest reform of the German company
law concerning the GmbH since its introduction in 1892 by passing the Gesetz zur
Modernisierung des GmbH-Rechts und zur Bekämpfung von Missbräuchen (MoMiG
– Law for the Modernisation of the GmbH and to stop its Misuse) in 2008. Its
centrepiece is the invention of a new entity, the “UG (haftungsbeschränkt)”. This
paper looks at the question whether the reform of the GmbH has succeeded and if the
GmbH remains a model for the future with the invention of the “UG
(haftungsbeschränkt)” in this new form, by comparing it to the company limited in
New Zealand. Three aspects are compared, that is the company’s foundation, its
structure and handling and the regulations of capital maintenance. The main changes
the invention of the UG has brought lie in the company’s foundation. This paper
comes to the conclusion that, even though it still might not compete with the limited
company model on the same level in this regard, the changes being made in the
MoMiG and with the establishment of the UG have lead to a facilitation of formation
and a considerable reduction of cost and time. A lot of the effects and instruments
implemented in the Company Law with the UG still have yet to be proven to work
and their popularity remains to be seen. However, the biggest strength of the UG lies
within the flexibility in respect to the internal structure, where almost the same
provisions apply as for the GmbH. Disadvantages occur in respect of the obligation
to set up reserves at the UG, but are in comparison to the Limited compensated by
less strict provisions concerning distributions. The Eigenkapitalkersatzrecht that
lacks a counterpart in New Zealand company law remains a burden on the GmbH
and the UG, and the Limited is more attractive in this regard.
All in all the UG helped to strengthen the attractiveness of the GmbH on the
global market of entity options. However, on a more abstract level, the Limited
company model remains a better opportunity for entrepreneurs. The UG will
certainly be modified in the future and its popularity remains to be seen as well as
how effective the measures and novelties implemented in the German Company Law
really are.
