Comparison of Legal Forms

FlexCo or GmbH –

which is the better legal form?

Both legal forms have their advantages. Our detailed comparison helps you make the best decision for your company.

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The Short Form: FlexCo offers more flexibility

We don't believe in long introductory texts - here are the general advantages and disadvantages of a FlexCo. A GmbH lack some flexibility (and thus cheaper to establish), but is the more recognized legal form.

Minimum Share Capital

FlexCo

€10,000. At least €5,000 must be paid in cash (total). At least €1 has to be paid in per share.

GmbH

€10,000. At least €5,000 must be paid in cash (total). At least €70 have to be paid in per share.
Share Denomination

FlexCo

No-par-value shares with €1 nominal value each possible. Such shares may carry special rights ("golden shares").

GmbH

Not possible - each shareholder holds one share.
Transfer of Shares

FlexCo

No notarial deed required: legal or notarial document ("private deed").

GmbH

Notarial deed mandatory.
Employee Participation

FlexCo

Company value shares (CVS) up to < 25% of the share capital; without voting rights, profit/exit participation; tag-along.VSOP/PSOP optional.

GmbH

No special class of non-voting shares. VSOP/PSOP commonly used (but no tax benefits available compared to CVS).
Decision Making

FlexCo

Circular resolutions without unanimity and voting via email possible; non-uniform voting explicitly permitted for trustees.

GmbH

Circular resolutions subject to limitations (all shareholders must approve that procedure).
Capital Measures

FlexCo

In addition, approved and conditional capital may be issued by managing directors.

GmbH

Only ordinary share capital increase.
Information Rights

FlexCo

CVS holders (e.g., employees) are allowed to participate in general meetings, pose questions and shall be informed about resolutions passed.

GmbH

Only one share class with unlimited information rights.
Supervisory Board

FlexCo

Required, if >EUR 350k balance sheet total, >EUR 700k annual turnover, 10 employees in average per year (2 out of 3 criteria must be met).

GmbH

Only the thresholds pursuant to the GmbH-Act apply.

Alle Angaben ohne Gewähr. Individuelle Beratung empfohlen.

When the GmbH (instead of FlexCo) makes sense

Recognized Form

For banks, corporations or international stakeholders, "GmbH" is typically well-known; FlexCo is new (since 01.01.2024) and sometimes explanations are required. (soft factor; legally equivalent.

Settled Case Law

For the GmbH, there are decades of established practice und case law; with FlexCo, some questions are still "in flux" due to lack of case law.

Rigid

The stricter formal requirments applicable for a GmbH may lead to a "desired friction" and protection from hasty decisions.

Size disadvantages

If you scale quickly towards medium sized FlexCo (see UGB thresholds), a supervisory board is mandatorily required.

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