Aktiengesellschaft (AG)

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What is an Aktiengesellschaft (AG)?

An Aktiengesellschaft (AG) is a German public limited company whose shares can be offered to the general public and traded on a stock exchange. Shareholders’ liability is limited to their capital contribution; they are not personally responsible for the company’s debts.

Key features

  • Abbreviated as “AG” and appended to the company name.
  • Share capital required by law (see Establishment below).
  • Two-tier governance: a managing board (Vorstand) and a supervisory board (Aufsichtsrat).
  • Subject to stricter regulatory and disclosure requirements than private companies.

Establishment and capital requirements

  • Minimum of five founding members.
  • Governed by the Stock Corporation Act (Aktiengesetz).
  • Minimum share capital: 50,000 euros, with at least 25% of each share’s nominal amount paid in at registration.
  • Articles of association must state the company name (including “Aktiengesellschaft”), registered office, share capital, shareholders’ contributions and share details. These documents are notarized and registered with the Commercial Register.
  • Once registration is complete and requirements are met, the AG becomes a legal entity and the registration is published officially.

Corporate governance

  • Managing board (Vorstand): responsible for day-to-day operations; must consist of one or more members. An AG with share capital of 3 million euros or more must have at least two managing board members.
  • Supervisory board (Aufsichtsrat): appoints and supervises the managing board; must have at least three members. Membership limits can be set in the articles of association.
  • Audit: statutory auditors review financial statements as required by law.

Employee participation

  • If an AG employs more than 500 workers, employee representatives occupy one-third of the supervisory board.
  • If employee numbers exceed 2,000, employee representatives fill half of the supervisory board.
  • These rules implement co-determination (Mitbestimmung) principles in larger companies.

Audit triggers

An ordinary company audit is generally required if the company meets three or more of the following conditions for two consecutive years:
* More than 50 full-time employees.
* Revenues exceed €2 million.
* Balance sheet total exceeds €100,000.

(Thresholds are statutory and may be subject to legislative updates; always check current law.)

AG vs. GmbH

  • AG: public company structure for entities that may list on a stock exchange and raise capital from the public.
  • GmbH (Gesellschaft mit beschränkter Haftung): privately held company with limited liability, commonly used for smaller or privately owned businesses.
  • Choice depends on funding needs, desired governance structure, and regulatory tolerance.

Examples

Major German corporations structured as AGs include:
* Volkswagen AG
* Mercedes‑Benz Group AG
* BMW AG

Key takeaways

  • An AG is Germany’s legal form for publicly traded corporations with limited shareholder liability.
  • It requires minimum capital, formal registration, and a two-tier board structure.
  • Larger AGs include employee representation on the supervisory board and face more extensive audit and disclosure obligations than private companies.

References

  • German Stock Corporation Act (Aktiengesetz) / Commercial Code
  • Federal Ministry of Justice — relevant statutory provisions
  • Comparative guides on doing business in Germany (e.g., Deloitte Legal)