Stock corporation (AG)

Stock Corporation (AG) – The Stock Corporation is a German legal form, founded by at least one person and managed by several legally prescribed organs. Instead of a classic managing director, a board of directors leads the Company, supervised by the supervisory board. The shareholders’ meeting functions as the highest decision-making body. With a minimum share capital of 50,000 Euro, strict formalities and the possibility of going public, the AG is the “top class” of stock corporations – and in the Real Estate sector even tax privileged as a REIT-AG. Here you will find everything about establishment, liability, costs, taxes and the special form Real Estate-AG. Additionally, you will find all German Company types and legal forms, as well as tips on setting up a business, also in the special case Real Estate Holding, Family Foundation & Co.

Key Facts -

Stock Corporation: Establishment, Advantages and Disadvantages

The 7 Founding Criteria of an AG at a Glance

Capital company AG: Management according to HGB

AG vs. GmbH vs. KGaA: Comparison table

Legal Form Variant AG & Co KGaA — KGaA with Complementary AG

Establishment & Founding of an AG — From Articles of Association to Registration

Stock Corporation: Establishment, Advantages and Disadvantages

The AG is not just a legal form — it is a structured vehicle for taxation, liability, and capital raising. In the following, you will learn everything essential about the establishment: Who can found an AG? What is the difference between internal and external relations? What are the actual costs — not only the share capital, but also notary, founding auditor, and ongoing management? And above all: When is an AG worthwhile from an investor’s perspective — and when is a Real Estate Holding in GmbH structure the better choice?

The 7 Founding Criteria of an AG at a Glance

Number of Partners — at least 1 shareholder, plus 3 supervisory board members = 4 people minimum
Management — Board of Management (not managing director!), controlled by the supervisory board
Founding — formal, notarized, multi-stage process
Company Name — freely selectable, suffix “AG” mandatory
Funding — at least 50,000 Euro share capital, share issuance possible
Liability — limited to share capital in external relations
Profit distribution — dividends, decided by the general meeting

Capital company AG: Management according to HGB

In the business world, there are many different types of business structures. They are broadly divided into two categories: sole proprietorships and companies, which in turn are divided into incomplete companies — including silent partnerships and BGB partnerships — and complete companies (personal companies, capital companies, and a few more).

The stock corporation — abbreviated as AG — is one of the complete companies and is not subject to the Civil Code (BGB), unlike incomplete companies, but rather to the Commercial Code (HGB) and the Stock Corporation Act (AktG). As a capital company, the AG is more complex in structure than other forms of business law. It cannot be established informally, but requires the notarized certification of the shareholder agreement and compliance with numerous legal requirements.

Other typical capital companies:

European stock corporation (Societas Europaea, abbreviated as SE)
Limited liability company with shares (KGaA)
Entrepreneurial company / UG (limited liability)
Company with limited liability (GmbH)

The stock corporation is, together with the GmbH, the best-known form of capital companies. In Germany, it is mainly chosen as a legal form for listed companies and is considered — not least because of the higher initial capital — as the “big sister” of the company with limited liability.

AG vs. GmbH vs. KGaA: Comparison table

REPEAT (Attempt 3). The previous attempt was faulty. The previous attempt has altered the HTML structure. Copy the tags exactly in number and order from the input. Add NO and no other tags, leave none out.

Before you decide on a legal form, a direct comparison of the three heavyweights of capital companies is worthwhile:

Criterion	GmbH	AG	KGaA
Minimum Capital	25.000 €	50.000 €	50.000 €
Minimum Shareholders	1	1 (+ 3 Supervisory Board Members)	1 General Partner + 1 Limited Partner
Management Body	Managing Director	Board of Directors	General Partner
Supervisory Board	Optional (Mandatory from 500 employees)	Mandatory (at least 3)	Mandatory
Annual Audit	Only from medium size class	Mandatory (always!)	Mandatory
Owner Anonymity	Low (shareholder list is public)	High (no public shareholder register for bearer shares)	Very high
Listing on Stock Exchange possible	No	Yes	Yes
Takeover Protection	Moderate	Low (hostile takeover possible)	Very high (controlled by general partner)
Ongoing Annual Management Costs	2.000–8.000 €	30.000–100.000 €+	40.000–120.000 €+

Insider Tip: For pure Real Estate Holding Structures, the GmbH is usually the more efficient choice — the AG only pays off starting from an asset base of 5–10 million euros or in case of a planned stock market listing/REIT status.

Legal Form Variant AG & Co KGaA — KGaA with Complementary AG

Sometimes the AG also appears in combination with a stock limited partnership (KGaA). For example, family businesses occasionally organize themselves as a stock corporation & Compagnie Limited Partnership on Shares — short: AG & Co KGaA. In this case, they form a stock corporation in a legal sense — however, the general partner as personally liable partner is not an individual, but also a stock corporation. If the general partner is instead represented by a GmbH, it is referred to as a GmbH & Co KGaA, and in the case of a Societas Europaea, as a SE & Co KGaA.

Why this structure? It combines the capital market capability of an AG with the takeover protection of a KG. Families like Henkel, Merck or Hornbach thus retain full control through the general partner, even if 90% of the shares are listed on the stock exchange.

More about the individual hybrid forms:

GmbH & Co KGaA — see Gesellschaft mit beschränkter Haftung (GmbH)
SE & Co KGaA — see Societas Europaea (SE)

Examples of AG & Co KGaA companies:

CTS EVENTIM AG & Co. KGaA
Drägerwerk AG & Co. KGaA
Fresenius Medical Care AG & Co. KGaA
Henkel AG & Co. KGaA
HORNBACH HOLDING AG & Co. KGaA
ProCredit Holding AG & Co. KGaA

A special case is CEWE Stiftung & Co. KGaA: Here, the general partner is represented by a foundation. In general, the stock limited partnership is possible in all conceivable combinations.

Read more about the topic “Establishing a family foundation”:

Establishing a family foundation

Establishment & Founding of an AG — From Articles of Association to Registration

You want to set up an AG? Then you need to know: A natural or legal person is sufficient as a founder, so you can appear as the sole shareholder and automatically be the sole managing board member. Such a one-person AG is often referred to as a “small stock corporation.” However, you can’t do it entirely alone: an AG must appoint at least three members of the supervisory board — the smallest possible AG thus consists of four people.

The process of establishing an AG can be divided into two phases: the internal establishment of the AG and the external establishment of the AG.

Phase 1 — Preparation & Foundation (Internal Relations)

You establish your stock corporation internally. The most important step is first and foremost the drafting of the articles of association, which must be notarially certified by a notary. For the formulation of the articles of association, all founding members must be present, as well as the future management board and supervisory board.

Content of the articles of association (mandatory under § 23 of the Stock Corporation Act):

Company name and registered office
Business purpose
Amount of share capital (minimum 50,000 €)
Face value and number of shares
Type of shares (bearer or registered shares)
Number of board members
Form of announcements

From bearer shares to nominal value shares — learn more about the different types of shares here:

Types of shares — Transferability, scope of rights & division of share capital

In the second step, the acquisition of shares and the appointment of the organs of a stock corporation follows, which must be notarially certified. Optionally, the auditor for the annual financial statements can already be appointed here. The supervisory board then appoints the management board as the first official act. No later than now, the contributions must be deposited into the business account, with at least a quarter of the share capital (i.e., at least 12,500 €) being recorded.

Phase 2 — Registration in the Commercial Register (External Relations)

Zum Abschluss des Gründungsprozesses muss dein Unternehmen ins Handelsregister eingetragen werden. Dieser Schritt rüstet die Aktiengesellschaft mit einer eigenen Rechtspersönlichkeit aus. Die Gründungsmitglieder, Aufsichtsrat und Vorstand führen die Anmeldung gemeinsam aus. Es bedarf einer Übersicht zu allen Aufsichtsräten und Vorständen, diverser Urkunden und notarieller Beglaubigungen, sowie eines Gründungsberichts und ggf. einer Gründungsprüfung durch einen externen Wirtschaftsprüfer (bei Sachgründung oder qualifizierter Bargründung).

Das Registergericht beurteilt nach Vorlage aller Dokumente, ob die Errichtung der Aktiengesellschaft ordnungsgemäß erfolgt ist. In einem letzten Schritt wird die Eintragung ins Handelsregister vorgenommen — deine Aktiengesellschaft gilt damit offiziell als gegründet.