GMBH AND UG (MINI-GMBH) – PROTECTION OF CREDITORS IN GERMAN LAW

One of the most widespread forms of companies, not only in our, but also in other jurisdictions, are limited liability companies. This form gives clear advantages to its founders, but at the same time endangers the creditor’s settlement. In this paper, the author lists and describes the ways of protecting the company’s creditors in the German law, namely the creditors of GmbH and the newer UG (Mini-GmbH) with brief reviews of Serbian law and d.o.o. First of all, there is a possible liability of shareholders and directors of German companies in the very stage of establishment. Furthermore, payments to shareholders from the assets that are necessary to cover the share capital are prohibited. In addition to its legal minimum share capital of EUR 25.000, GmbH contains further institutes for adequate creditor protection, which makes it attractive not only to the founders, but also to its creditors. In 2008, with the Law on Modernization of the Rights of Limited Liability Companies and the Fight against Abuses (MoMiG), the German legal system introduced a new legal form of simplified GmbH (UG), which has the same nature with a few special characteristics. This is primarily the possibility of founding a company below the prescribed legal minimum of the share capital, namely 1 euro. This legal form should be an alternative to the English “Limited”, which was “flooding” the German market back then. This advantage brings certain restrictions, first of all in terms of capital maintenance rules. Due to the fact that d.o.o. has significant similarities with the general rules that apply to these legal forms of the German system, primarily due to similarities with UG in the form of a minimum share capital of 100 dinars, the characteristics and solutions of German law for the protection of creditors of this legal form will be analysed. At the end comes a brief review of the institute “piercing a corporate veil” in the German law system.