To understand the German tax law for companies you need to understand that companies in Germany are broadly speaking divided in two groups. Either they are own tax individuals (corporate structures such as GmbH and AG) or they are (limited) partnerships and the shareholders are considered as the ones that have to pay taxes for the profit. There is no “check the box”. If you are for example a GmbH you cannot choose to be treated as a GmbH & Co KG (=limited partnership).
An AG (Aktiengesellschaft) is a stock corporation. It is treated for tax purposes exactly as a GmbH. The structure is different: Instead of one director it has an executive board with several members. You would also have a supervisory board to control the executive board especially in issues concerning themselves (working contracts etc.). The starting minimum capital is EUR 50.000 and the AG needs to comply with a lot of formalities. The change from a GmbH to an AG is not very complicated because they are in the same tax category. Therefore, one would usually start business with a GmbH and not right away with an AG.
With other companies liability is not limited. One of those is the Gesellschaft buergerlichen Rechts (GbR). It is the simpliest company structure because you do not need a notary and the GbR is not registered anywhere. This legal form is typical used by young entrepreneurs who do not have the money to start with a GmbH or a GmbH & Co KG or by certain professional groups where a company with limited liabilty may not be used by law (e. g. doctors).
Please see the details for german tax law for companies in Germany in the following articles.
1. German tax law for companies – GmbH
2. German tax law for companies – GmbH & Co KG
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