Germany’s Act Implementing the Digitalisation Directive – the DiRUG – was intended to enable the incorporation of a German GmbH and Unternehmergesellschaft (haftungsbeschränkt), or UG, by video conference from 1 August 2022. The procedure was subject to technical, identification and substantive requirements. Under the legal position discussed in this article, cash incorporations were covered, while contributions in kind and other legal forms were initially outside the scope.
This article was first published on 11 May 2022 and describes the planned legal framework for the launch of the online procedure on 1 August 2022. It is not a current step-by-step guide to incorporating a German company.
1. What did the DiRUG regulate?
Germany’s Act Implementing the Digitalisation Directive introduced additional digital tools for German company law. A key element was the possibility of notarising the incorporation of a GmbH or UG by video communication and filing the related documents and information with the commercial register electronically.
The online procedure was intended to operate alongside the traditional in-person procedure. The founders and the notary would no longer necessarily have to meet physically in the same room.
2. Online notarisation of a GmbH or UG
From 1 August 2022, the articles of association and certain shareholder resolutions connected with the incorporation were intended to be notarised by video communication.
The personal meeting between the notary and the founders could therefore be replaced by a virtual notarisation appointment. A mixed procedure was also possible under the framework described in the article: some founders could participate online while others attended a notary’s office in person.
The notary still had to perform the legally required review and identification functions. Digitalisation changed the form of the appointment, not the notary’s professional responsibilities.
3. Which companies were covered?
The procedure was initially focused on the incorporation of a GmbH and a UG. Other legal forms, including stock corporations and partnerships, were not covered in the same way under the legal position discussed in the article.
The online procedure was also primarily designed for cash incorporations. Contributions in kind were initially excluded from the scope described in the article because they require additional assessment of assets, rights and valuation.
A simplified incorporation using a model protocol could also be considered if the statutory requirements were met. Whether a model protocol was appropriate depended on the number of shareholders, the management structure and the need for individual provisions.
4. Notary jurisdiction and technical platform
Under the framework described in the article, the competent notary was generally determined by the notary’s official district. Relevant connecting factors included the registered seat of the company, the seat of a German branch of a foreign company, or the residence or seat of a shareholder.
Online notarisation was not intended to take place through any ordinary video-conferencing platform. The procedure was to use the secure infrastructure provided by the German Federal Chamber of Notaries.
The platform was intended to support registration, identity verification, video communication, electronic signatures and the secure transmission of documents and commercial-register filings.
5. Identity verification and electronic signature
Participants had to register on the platform and use an identification document with an electronic identity function. The identity document could be read through a smartphone using the designated application.
During the video appointment, the notary also had to inspect the official photo identification of the participants. All participants had to remain visible and audible. The notary read the deed, after which the founders signed the electronic document using the required electronic signature standard.
The notary then handled the further steps, including the filing of the incorporation with the commercial register and the communication of the registration notice.
6. When could the notary refuse the online procedure?
The notary could refuse to notarise online if the notary’s official duties could not be properly performed by video communication. This could include uncertainty about a participant’s identity, legal capacity or capacity to contract, technical interruptions, or other circumstances affecting the security of the notarisation.
In such cases, the traditional in-person procedure remained available and could be necessary.
7. Practical obstacles
The requirement for an appropriate electronic identity document was a significant practical obstacle. A participant without a suitable eID document or the ability to use its electronic function could not necessarily take part in the online procedure under the legal framework described in the article.
Other possible difficulties included unstable internet connections, audio or camera problems, the exclusion of contributions in kind and the complexity of cross-border identification.
For international founders, the online procedure could reduce travel. At the same time, the identification requirements could make the procedure difficult for people whose home country did not provide a compatible electronic identity system.
8. Practical impact for founders and businesses
The online procedure was intended to make access to German company formation easier, particularly for international founders and shareholders. It could reduce travel and make the incorporation appointment more flexible.
The authors regarded the DiRUG as an important step towards the digitalisation of German company law. They also considered further digitalisation desirable, including electronic filings with authorities, digital communication with courts and banks, and multilingual online portals.
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Frequently asked questions
Can a GmbH be incorporated online in Germany?
Under the DiRUG framework described in this article, notarisation of a GmbH incorporation by video communication was intended to be available from 1 August 2022. This article reflects its first-publication date of 11 May 2022 and is not a current procedural guide.
Can a German UG also be incorporated online?
Yes. The online procedure was also intended to cover the Unternehmergesellschaft (haftungsbeschränkt), commonly referred to as a UG.
Is a notary still required?
Yes. Online incorporation replaces the physical meeting, not the notarial act. The notary continues to perform the required checks and notarisation steps.
Can a GmbH with contributions in kind be incorporated online?
Under the legal position described in the article, the online procedure initially focused on cash incorporations. Contributions in kind were not covered in the same way.
Can founders participate from different locations?
A mixed notarisation procedure was intended to allow some participants to join online while others attended a notary’s office in person, subject to the applicable legal and technical requirements.
What if a founder does not have an eID-enabled identity document?
Under the framework described in the article, the founder might not be able to participate online. Depending on the circumstances, an in-person appointment, representation or consular notarisation could remain possible alternatives.