gGmbH

A gGmbH, or gemeinnützige GmbH, is a form of German limited liability company (GmbH) designed for non-profit purposes. It combines the corporate liability protections of a GmbH with a charitable or public-benefit objective, making it a common structure for charities, cultural institutions, research bodies, and educational organizations seeking a formal, professional framework for their activities.

Formation and requirements: A gGmbH is formed under the standard GmbH framework and must have a minimum share capital of 25,000 euros, with at least half contributed at formation. The articles of association must specify non-profit purposes and provide that profits are used exclusively for those purposes. Private distributions to shareholders are prohibited. The company must be registered in the commercial register and, upon qualification, receive the status of gemeinnützig from the local tax office (Finanzamt), which issues a certificate of non-profit status after review of activities.

Operations and governance: A gGmbH operates with a management board (Geschäftsführung) and typically one or more shareholders or a supervisory structure, depending on its setup. It must manage its resources in line with its charitable purposes and comply with reporting and audit requirements. Remuneration for board members and staff is allowed if reasonable and directly related to the organization’s non-profit objectives and documented accordingly.

Tax status and benefits: Once recognized as gemeinnützig, a gGmbH is generally exempt from corporate income tax and trade tax. Donations to the gGmbH are often tax-deductible for the donor, subject to applicable limits. Ongoing compliance with non-profit purposes and regular reporting are required to maintain the status; loss of the charitable purpose can lead to revocation of the status and potential tax consequences.