The limited liability company (LLC) is the most common legal form for companies in Germany. This legal form is often used by international companies that have decided to set up a subsidiary in Germany; Local entrepreneurs also choose this legal form for their small and medium-sized enterprises. It combines relatively few obligations with a high degree of flexibility that can be established in any economic sector. The limited liability company is subject to corporation tax, trade tax and the solidarity surcharge. The minimum share capital for LLC is 25,000 EUR, with at least 12,500 EUR verifiable in the bank account at the time of company registration. As the name of this legal form suggests, partners are only liable with the capital they bring in and do not risk their personal assets.

An LLC is usually both managed by the company's directors and legally represented. For a GmbH, at least one managing director must be appointed who does not have to be a shareholder in the company or resident in Germany. As a rule, shareholders can exercise direct influence on the company by issuing binding instructions to the managing director. Before deciding whether LLC is the most suitable legal form for your business, keep in mind that stocks of this type cannot be publicly offered. Meanwhile, the administrative and financial controls are also less stringent compared to public companies.

Mini GmbH
Another, very similar legal form for companies is the mini GmbH, which is essentially the same as the regular GmbH in terms of limitations of liability and no restrictions on the conduct of business. Meanwhile, it enables entrepreneurs to bring in less capital when registering the company in Germany and thus risk with fewer funds at the start of business. In fact, no minimum capital is required at all. Instead, 25% of the company's profits are to be placed in special reserves until the total amount reaches EUR 25,000. In this case, the company will be converted into a regular LLC. Mini Ltd. enables young entrepreneurs to start their business with less capital, lowering their risk and cost of capital until the business is successful and making a profit.

German LLC taxation
In general, taxes are enforced and administered by the local tax office. Local tax offices are usually responsible for administrating individual income tax, Corporate Income Tax (CIT) as well as Real Estate Transfer Tax (RETT) and Value Added Tax (VAT). While Trade Tax is based on the corporate taxes administered by local tax office, the enforcement of Trade Tax is under local municipalities' responsibility. German LLCs are generally subject to taxes explained below:

Corporate Income Tax – levied on company's worldwide income, unless double tax treaty is in place. CIT rate is 15%, meanwhile a solidarity surcharge of 5.5% is levied on the amount of CIT. This results in aggregated tax rate of 15.825%;
Trade Tax – levied by the municipality of the registered office of the business. Standard tax rate is 3.5%, while additional multiplier is supplemented in range of 200% to 500% and set by each municipality individually. This results in aggregated tax rate of 7% to 17.5%.
Both taxes are assessed on an annual basis, however, companies are obliged to make prepayments of CIT and trade tax on a quarterly basis based on an estimated tax amount due of the current year.