Size Classes

German company size classes: micro, small, medium and large under the HGB

German commercial law (HGB) sorts every corporation into one of four size classes — micro (kleinst), small (klein), medium (mittelgroß) or large (groß). The class is not something you choose; it follows automatically from three financial criteria and it decides how much you must prepare, have audited and publish. This page explains the four classes, the § 267 test, and exactly what each threshold changes.

The four size classes at a glance

Thresholds for fiscal years beginning after 31 December 2023 (raised by the Wachstumschancengesetz).

Micro — Kleinstkapitalgesellschaft (§ 267a)

Up to €450,000 balance sheet total, €900,000 revenue and 10 employees. The lightest regime: a shortened balance sheet and GuV, and the notes (Anhang) may be dropped entirely.

Small — kleine (§ 267 Abs. 1)

Up to €7.5m balance sheet total, €15m revenue and 50 employees. No statutory audit, no management report, reduced notes, and no income statement in the published version.

Medium — mittelgroße (§ 267 Abs. 2)

Up to €25m balance sheet total, €50m revenue and 250 employees. A statutory audit and a management report (Lagebericht) both become mandatory, with some filing reliefs under § 327.

Large — große (§ 267 Abs. 3)

Exceeds two of the medium thresholds, or is capital-market-oriented. Full statements, full audit, full publication, and — if listed — a cash-flow statement and statement of changes in equity.

The three criteria

Every class is defined by the same three numbers.

  • Balance sheet total (Bilanzsumme) — total assets, after the § 267 Abs. 4a adjustment for any deficit not covered by equity.
  • Revenue (Umsatzerlöse) — net turnover in the twelve months before the balance sheet date.
  • Average number of employees (§ 267 Abs. 5) — the average of the four quarter-end headcounts across the year.
  • The euro thresholds were raised for fiscal years beginning after 31 December 2023, so a company at the old limits may now sit a class lower.

The two-of-three test

You belong to a class if you do not exceed at least two of its three thresholds. In other words, you may breach one criterion and still stay in the class — it is only when two of the three are exceeded that you move up. A company with a €9m balance sheet total but modest revenue and headcount, for example, can remain small.

This matters because the criteria pull in different directions. A capital-heavy holding may have a large balance sheet but few employees and little turnover; a labour-intensive service firm may have many staff but a small balance sheet. The two-of-three rule keeps a single outlier from reclassifying an otherwise smaller company.

The two-consecutive-years rule (§ 267 Abs. 4)

A change of class only takes legal effect if the thresholds are met or exceeded on two consecutive balance sheet dates. A one-off spike — an unusually large project, a temporary balance sheet inflation — does not immediately push you up or down; the new figures must persist for two years running.

There is one exception: for a newly formed company or after a reorganisation, the very first balance sheet date already fixes the class. New entities do not get a grace year — the first set of statements is prepared under whatever class the opening numbers imply.

What each class changes

  • Audit: mandatory for medium and large (§ 316); none for small or micro.
  • Management report (Lagebericht): required for medium and large only; small and micro are exempt (§ 264 Abs. 1 Satz 4).
  • Notes (Anhang): full for large, reduced for small, and optional for micro (§ 264 Abs. 1 Satz 5).
  • Publication: full for large, reduced for small (balance sheet and reduced notes, no GuV), and a mere deposit (Hinterlegung) for micro.
  • Preparation deadline: three months from year-end for medium and large; six months for small and micro (§ 264 Abs. 1).

Always large: capital-market-oriented companies

Size is not the only route to the large class. Under § 267 Abs. 3 Satz 2, a corporation that has issued shares or bonds on an organised (regulated) market is treated as large regardless of its balance sheet, revenue or headcount. A small listed AG is a large company for HGB purposes and carries the full obligations that go with it.

Frequently asked questions

What are the German company size class thresholds for 2024/2025?

Micro: €450,000 balance sheet total, €900,000 revenue, 10 employees. Small: €7.5m, €15m, 50. Medium: €25m, €50m, 250. Large: above two of the medium limits. These raised figures apply to fiscal years beginning after 31 December 2023.

What does "two of three" mean for size classification?

You stay in a class as long as you do not exceed at least two of its three criteria — balance sheet total, revenue and employees. Breaching only one still keeps you in the class; two exceeded thresholds move you up.

How does the two-consecutive-years rule work?

Under § 267 Abs. 4 HGB a reclassification only takes effect once the thresholds are met or exceeded on two balance sheet dates in a row. A single year outside the limits does not change your class — except for a newly formed company, where the first balance sheet date already sets it.

Do these size classes apply to a GmbH?

Yes. The § 267 classes apply to all corporations — GmbH, UG, AG, SE, KGaA — and to partnerships without a natural person as fully liable partner, such as a GmbH & Co. KG (§ 264a). Most German GmbHs are small or micro.

What is the balance sheet total for the size test?

It is the total assets shown on the balance sheet (Bilanzsumme), adjusted under § 267 Abs. 4a for any loss not covered by equity (a nicht durch Eigenkapital gedeckter Fehlbetrag), which is excluded from the figure.

Can a small company become large in one year?

Not from the numbers alone — that needs two consecutive years above the thresholds. But becoming capital-market-oriented (issuing listed shares or bonds) makes a company large immediately under § 267 Abs. 3 Satz 2, whatever its size.