Medium Company

Medium-sized company (mittelgroße Kapitalgesellschaft): what changes

The medium class — mittelgroße Kapitalgesellschaft under § 267 Abs. 2 HGB — is the threshold at which the light-touch reliefs end. A statutory audit and a management report both become mandatory, and the notes expand. But medium companies keep some filing reliefs under § 327. This page explains the thresholds and the step-up in obligations.

Medium-company thresholds

You are medium-sized if you exceed the small-company limits but stay under at least two of these three: €25m balance sheet total, €50m revenue and 250 employees on average. As with every class, the two-of-three test and the two-consecutive-years rule of § 267 Abs. 4 apply — you become medium once you have been above the small limits on two balance sheet dates in a row.

The practical jump from small to medium is the largest in the HGB system, because it is here that the audit and the management report first appear.

Two new obligations

Statutory audit (§ 316)

A medium company must have its Bilanz, GuV and Anhang audited by a Wirtschaftsprüfer, who issues an audit opinion (Bestätigungsvermerk). Without a valid audit, the statements cannot be lawfully adopted or filed.

Management report (§ 289)

A Lagebericht is now required alongside the statements: a narrative on the course of business, position, risks and outlook. Small and micro companies are exempt from it; medium and large are not.

Fuller notes (Anhang)

Many § 288 reliefs that a small company enjoyed fall away. A medium company gives more detail — for example on revenue breakdown and other disclosures — though § 327 still permits some abridgement in the filed version.

Filing reliefs the medium class keeps (§ 327)

A medium company does not have to disclose everything a large one does. Under § 327 HGB it may file the balance sheet in a partly abridged form — closer to the small-company scheme but retaining a defined set of additional line items — and it may omit certain notes disclosures. Unlike a small company, however, a medium company does publish its income statement.

These reliefs shrink what reaches the public record without changing what you prepare internally. The full audited statements still exist; § 327 only governs the disclosed version.

Tighter deadlines

  • Preparation is due within three months of the balance sheet date (§ 264 Abs. 1) — half the six-month window a small company gets.
  • The audit must be completed before the statements are adopted, so the audit timetable sits inside those three months.
  • Filing with the Unternehmensregister is due within twelve months of year-end (§ 325).
  • A GmbH's shareholders adopt the audited statements within eight months of year-end (§ 42a GmbHG), earlier than the eleven months a small GmbH has.

Frequently asked questions

What are the thresholds for a medium-sized company in Germany?

A mittelgroße Kapitalgesellschaft exceeds the small limits but stays under at least two of: €25m balance sheet total, €50m revenue and 250 employees — measured over two consecutive balance sheet dates (§ 267 Abs. 2 HGB).

Does a medium-sized company need an audit?

Yes. Under § 316 HGB medium and large corporations must have their annual statements audited by a Wirtschaftsprüfer, who issues an audit opinion. The statements cannot be adopted or filed without it.

Does a medium company prepare a management report?

Yes. The Lagebericht under § 289 HGB is mandatory for medium and large corporations. It accompanies the balance sheet, income statement and notes and reports on business performance, risks and outlook.

What filing reliefs does § 327 HGB give?

A medium company may file a partly abridged balance sheet and omit certain notes disclosures, so less reaches the public record than for a large company. Unlike a small company, though, it does publish its income statement.

How long does a medium company have to prepare its accounts?

Three months from the balance sheet date (§ 264 Abs. 1), with the audit fitting inside that window, and twelve months to file (§ 325). A GmbH's shareholders adopt within eight months (§ 42a GmbHG).

What is the difference between a medium and a large company?

Both are audited and prepare a Lagebericht. A large company loses the § 327 filing reliefs, publishes the full statements, and — if capital-market-oriented — must add a cash-flow statement and a statement of changes in equity.