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Legal forms

With the business type, you are giving your business a fixed framework and providing governance on key issues regarding ownership, risk-sharing and liability. At the same time, the legal form of a business affects the administrative process - both when it comes to setting up the business and the legal obligation to keep records - and taxation.

Types of business forms

The various business forms can be grouped into sole traders, partnerships and incorporated companies. Sole traders and partnerships are distinguished by the fact that the sole trader or partners have unlimited personal liability for the business’s debts. They do not have to do raise any minimum capital.

Incorporated companies have the benefit of limited liability - the members or shareholders are liable only to the extent of their contributions. Depending on the enterprise, this may be a key reason for opting for an incorporated company.

Sole trader:

  • Business person


  • Private company (GbR)
  • General partnership (OHG)
  • Partner company (PartG)
  • Limited partnership (KG)
  • Company with limited liability & limited partnership company (GmbH & Co. KG)

Incorporated companies:

  • Company with limited liability (GmbH)
  • Entrepreneurial company (UG)
  • Public limited company (AG)
  • Registered cooperative (eG)

Tip: Information & advice

Your STARTERCENTER NRW will provide you with preliminary information on selecting the legal form of the business. We would advise you to seek expert legal and tax advice when making your ultimate selection.