Founders' Guide

German accounting for startups: what begins at incorporation

Founding a German GmbH or UG brings statutory accounting duties from day one. This guide is for foreign founders: it explains what obligations start at incorporation, why your first year is almost always the micro size class, and how to get the first Jahresabschluss done without overbuilding.

Accounting duties begin the day you incorporate

A GmbH or UG (haftungsbeschränkt) is a merchant (Kaufmann) by legal form. From formation you must keep double-entry commercial books (§ 238 HGB) and prepare an opening balance sheet (Eröffnungsbilanz) at the start of the business, then a full Jahresabschluss at each year-end (§§ 242, 264 HGB).

There is no grace period. Unlike a small sole trader, a corporation cannot rely on the § 241a HGB exemption from double-entry accounting; the duty applies from the first day regardless of turnover.

Your first-year size class: almost always micro

Size classes under § 267 / § 267a HGB run on balance sheet total, revenue and employees. A new company almost always starts as a Kleinstkapitalgesellschaft (micro): ≤ €450,000 balance sheet total, ≤ €900,000 revenue, ≤ 10 employees on average.

Micro status brings real relief: an abbreviated balance sheet, a shortened GuV, no Lagebericht, no audit, and the option to omit the Anhang entirely if you show a few figures beneath the balance sheet (§ 264 Abs. 1 Satz 5). You can even deposit (hinterlegen) a shortened balance sheet rather than publish it (§ 326 Abs. 2). Because size class is tested over two consecutive years (§ 267 Abs. 4), a fast-growing startup keeps its reliefs until it has been over the threshold twice.

What you have to set up

  • A chart of accounts — typically the German standard SKR03 or SKR04.
  • An opening balance sheet (Eröffnungsbilanz) reflecting the paid-in share capital.
  • Ongoing double-entry bookkeeping producing a monthly trial balance (Saldenliste).
  • VAT registration and periodic advance returns (Umsatzsteuer-Voranmeldung) where applicable.
  • A defined financial year (often the calendar year for a new entity).
  • A year-end process to turn the trial balance into the statutory Bilanz, GuV and, if not omitted, the Anhang.

Your first Jahresabschluss

Components

At minimum a Bilanz (§ 266) and GuV (§ 275). As a micro entity you can omit the Anhang if you disclose the required figures under the balance sheet (§ 264 Abs. 1 Satz 5).

Deadlines

Micro and small entities prepare within 6 months of year-end (§ 264 Abs. 1) and file within 12 months (§ 325). Miss it and the Bundesamt für Justiz fines from €2,500 (§ 335).

No audit

Micro and small startups are not subject to a statutory audit (§ 316 HGB), so you can prepare and file without a Wirtschaftsprüfer.

Language

The filing is in German and euros (§ 244). An English convenience translation helps a foreign founder review it, but the German document is what is filed.

UG specifics

The UG (haftungsbeschränkt) is a GmbH variant with low minimum capital. Its accounting is the same as a GmbH's, with one addition: it must allocate a quarter of its annual profit to a statutory reserve until subscribed capital reaches €25,000 (§ 5a Abs. 3 GmbHG), at which point it can convert to a regular GmbH.

Otherwise, treat the UG exactly like a micro GmbH for statutory purposes — same components, same deadlines, same reliefs.

Frequently asked questions

What accounting must a new German GmbH do from day one?

Keep double-entry commercial books (§ 238 HGB), prepare an opening balance sheet at formation, and prepare a full Jahresabschluss at each year-end (§§ 242, 264 HGB). The duty applies immediately, regardless of turnover.

What size class is a startup GmbH in the first year?

Almost always micro (Kleinstkapitalgesellschaft, § 267a HGB): under €450,000 balance sheet total, €900,000 revenue and 10 employees. That brings an abbreviated balance sheet, no audit and the option to omit the Anhang.

Does a UG have to file annual accounts too?

Yes. A UG (haftungsbeschränkt) is a corporation and files exactly like a GmbH, with the added duty to build a statutory reserve from 25% of profit until capital reaches €25,000 (§ 5a Abs. 3 GmbHG).

When is the first Jahresabschluss due?

A micro or small startup prepares within 6 months of the balance sheet date (§ 264 Abs. 1 HGB) and files with the Unternehmensregister within 12 months (§ 325 HGB).

Do we need an audit as a startup?

No. Micro and small corporations are not subject to a statutory audit (§ 316 HGB). An audit only becomes mandatory if you grow into the medium size class over two consecutive years.