Stock Corporation

Definition of the Stock Corporation (AG)

The stock corporation (AG) is a capital company whose share capital is divided into shares. It is regulated by the Stock Corporation Act (AktG) and is particularly suitable for large companies with high capital requirements.

Characteristics of the AG

• The AG is a legal entity with its own rights and obligations.
• The share capital is divided into shares that can be traded on the stock exchange.
• The liability of shareholders is limited to their contribution (limited liability).
• The AG must be registered in the commercial register.
• The company name must contain the designation "Aktiengesellschaft" or "AG".
• The AG has three bodies: management board, supervisory board, and general meeting.

Bodies of the AG

The AG has three bodies with different tasks and powers:

1. Management Board: Conducts business and represents the company externally.
2. Supervisory Board: Monitors and advises the management board and appoints its members.
3. General Meeting: Supreme body in which shareholders exercise their rights.

Formation of an AG

The formation of an AG is complex compared to other legal forms and requires a minimum capital of 50,000 euros. The formation process includes the following steps:

1. Establishment of the articles of association: Regulations regarding company name, registered office, business purpose, share capital, and shares.
2. Appointment of the management board and supervisory board.
3. Formation audit by management board, supervisory board, and independent auditors.
4. Registration in the commercial register.

Advantages and Disadvantages of the AG

Advantages:

• Limited liability of shareholders
• Good opportunities for capital raising
• Transferability of shares
• Clear separation between ownership and management

Disadvantages:

• High formation and administrative costs
• Complex organizational structure
• Strict disclosure requirements
• Little influence of shareholders on management

Conclusion

The AG is a suitable legal form for large companies with high capital requirements that want to raise capital on the stock exchange. It offers a clear separation between ownership and management as well as limited liability for shareholders. However, the formation and administration of an AG is complex and cost-intensive.

Other legal forms can be viewed in the articles GbR, GmbH, GmbH & Co. KG, KG and OHG.