von Göler (Hrsg.) / Thomas Wülfing / Section 5

Section 5 Share capital; share

(1) The company’s share capital must amount to no less than twenty-five thousand euros.

(2) The nominal value of each share must be a full euro amount. A shareholder may subscribe to several shares upon formation of the company.

(3) The amount of the nominal values of the individual shares may be variously determined. The sum total of the nominal values of all the shares must equal the amount of the share capital.

(4) If contributions in kind are to be made, the object of the contribution in kind and the nominal value of the share to which the contribution in kind refers must be specified in the articles of association. The shareholders shall set forth in a report on company formation on the basis of contributions in kind the material circumstances which establish the appropriateness of the payments for contributions in kind and, where an enterprise is transferred to the company, shall state the annual results of the two previous financial years.

Information for non-professionals

To Information for legal professionals

Relevance for legal relations

Significance for the legal system, frequent cases of application

1As central rule of the GmbHG, rule 5 contains provisions as to the share capital, the nominal amount of a company share, and the non-cash contribution.Zeidler in: Michalski, GmbHG, § 5, Rn. 1 These provisions are mandatory law that the founders of a corporation cannot deviate from. The reason for that is that the provisions contained in rule 5 represent the central creditor protection regulations within the network of rules of the GmbHG.Zeidler in: Michalski, GmbHG, § 5, Rn. 2 That is why the German legislature, in the interest of the creditors of the corporation, has attributed particular weight to the raising and preserving of the share capital as recoverable assets.MüKo, Schwandtner, GmbHG, § 5, Rn. 3

This means that a formation of a GmbH without share capital is impossible under German law. Only after the share capital has been rendered as minimum recoverable assets, relief of the shareholder of the personal liability for debts of the corporation is justified.Zeidler in: Michalski, GmbHG, § 5, Rn. 1 Precisely for the lack of this accessory liability of its shareholders, the GmbH requires equity capital for its business dealings, as otherwise it would not be creditworthy and, therefore, incapable to act, anyway.Zeidler in: Michalski, GmbHG, § 5, Rn. 1 The fact that the legislature has safeguarded the duty to raising and preserving capital by an encompassing civil, registry and even criminal mechanism of sanctions clearly demonstrates, as well, which eminent significance is being attributed to the guaranteed minimum capital.Zeidler in: Michalski, GmbHG, § 5, Rn. 2

However, in the context of a progressing Europeanisation, the German legislature has been faced with the necessity finding a compromise as to the mandatory recoverable assets system of the GmbH in order to keep the GmbH competitive with other forms of companies without such minimum share capital in other European countries.Zeidler in: Michalski, GmbHG, § 5, Rn. 1 This has been done by creating the possibility to form a corporation as entrepreneurial company.

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Information for legal professionals

1) General

2a) Section Content and Function

Section 5 GmbHG contains basic rules, and determines minimum amounts of the share capital of the company, and of the amounts to be contributed by the shareholders. These rules are meant to ensure the raising and maintaining of the share capital, and primarily serve the protection of the creditors, and are altogether mandatory rules.Baumbach/Hueck/Fastrich, GmbHG, § 5, Rn.

2) Definitions

4a) (Original) Share Capital

aa) Term and Function

The term share capital is not only being used in section 5 paragraph 1 GmbHG, but also in various other regulations of the GmbHG (cf. section 3 paragraph 1 no. 3, section 5 paragraph 1 and 3, section 5a paragraph 1 and 5, section 7 paragraph 2, section 10 paragraph 1, sections 30, 33, 43 paragraph 3, 55 et seq., 61, paragraph 2, 75, 82 paragraph 2 no.

3) Summary of the jurisdiction

BGH, Urteil vom 30.11.1978 - II ZR 204/76, NJW 1979, 2104

BGH, Urteil vom 25.04.1988 - II ZR 175/87, NJW-RR 1988, 1181

BGH, Urteil vom 01.07.1991 - II ZR 180/90, NJW-RR 1991, 1312

BGH, Urteil vom 14.03.1977 - II ZR 156/75, BGHZ 68, 191, NJW 1977, 1196

BGH, Urteil vom 10.11.1958 – II ZR 3/57, BGHZ 28, 314, NJW 1959, 383

BGH, Urteil vom 02.05.1966 – II ZR 219/63, BGHZ 45, 338, NJW 1966, 1311

OLG Köln, Urteil vom 15.04.1994 – 20 U 149/93, GmbHR 1995, 293

BGH, Urteil vom 16.02.1959 – II ZR 170/57, BGHZ 29, 300, NJW 1959, 934

BGH, Urteil vom 15.05.2000 – II ZR 359/98, BGHZ 144, 290, NJW 2000, 2356

BGH, Urteil vom 14.06.2004 – II ZR 121/02, ZIP 2004, 1642

RG, RGZ 68, 271

RG, RGZ 86, 210

RG, JW 1934, 3196

4) Literature

Münchner Kommentar, Band 1., GmbH - Gesetz, Schwandter, 2. Auflage 2015, section 5 Stammkapital.

Baumbach/Hueck/Fastrich GmbHG, 20. Auflage 2013, section 5 Stammkapital.

Michalski/Zeidler Band 1., GmbH – Gesetz, 2. Auflage 2010, section 5 Stammkapital.

Ulmer/Habersack/Winter/Raiser, Band 1., GmbHG Großkommentar, 2. Auflage 2014.

Roth/Altmeppen, GmbHG, 8. Auflage 2015.

Scholz/Veil, Band 1., GmbH – Gesetz, 11. Auflage 2012, section 5 Stammkapital.

Prof. Dr. Heribert Hirte, Die Entwicklung des Unternehmens- und Gesellschaftrechts in Deutschland im Jahre 2011, NJW 2012, 581.

Sebastian Barta, Das Kapitalsystem von GmbH und AG – Inhalt und Zweck der Regelungen über Stamm- bzw. Grundkapital, GmbHR 2005, 65.

5) Frequently used (chains of) clauses