FAQ: GmbH or UG Liquidation in Germany
Deciding to close a GmbH or UG is an important step that involves more than just stopping business activity. It requires thoughtful planning across legal, financial, and administrative areas. Common reasons for closure include a shift in business goals, declining profitability, limited market potential, or personal circumstances such as health or retirement. In some cases, closure is part of a planned sale or restructuring.
To avoid unnecessary costs and administrative burdens, it’s important to carry out the process properly. With the right guidance, closing your company can be straightforward and efficient — ensuring clarity for all involved and a clean conclusion to your business activities.
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When should I consider closing my GmbH or UG?
You may want to close your company if:
- The business is no longer profitable or viable
- There’s low market demand or insufficient future business opportunity
- You’re dealing with personal or health-related challenges
- You intend to sell, restructure, or merge the company
The official closure avoids ongoing costs and potential liability.
What happens if I don’t close the company properly?
You remain personally liable as managing director. The company continues to accrue:
- Commercial registry fees
- Tax declaration obligations
- Accounting costs
- IHK (Chamber of Commerce) fees
What are the steps to liquidate a GmbH or UG?
- Shareholder Resolution
The shareholders vote to dissolve the company (§ 60 GmbHG). - First Notary Appointment
Dissolution and appointment of liquidators must be registered with the Commercial Register (§§ 65, 67 GmbHG). This requires notarization. - Liquidation Phase
Liquidators:- Settle debts
- Terminate contracts
- Sell company assets
- File a public creditor notice (starts the mandatory blocking year, § 73 GmbHG)
- Second Notary Appointment
After the blocking year ends, final distribution occurs. The company is deregistered, and your personal liability ends.
Are there any prerequisites for liquidation?
There are no formal prerequisites. Existing debts, tax liabilities, and obligations are resolved during the liquidation itself.
Do I still have to file taxes during liquidation?
Yes. Tax obligations continue until closure is complete. You must prepare:
- A liquidation opening balance
- Annual financial statements (if liquidation takes more than a year)
- A final liquidation balance
Note: Profits during liquidation can be taxed over the entire liquidation period (max. 3 years) instead of annually.
How long does liquidation take?
Liquidation usually takes at least 13 months, due to the legally required one-year creditor blocking period.
Is there a faster way to close the company?
The company may be closed without the one-year creditor blocking operiod, but only under strict conditions. There are two procedures that allow this.
a) Asset-Free Deletion by the Registry Court
If the company has:
- No assets
- No debts
- No contracts or ongoing obligations
then the Commercial Register court can delete it ex officio (§ 394 FamFG, § 60 GmbHG). This cannot be directly applied for, but it can be encouraged.
b) Asset-Free Dissolution
If your GmbH or UG meets all of the following:
- No debts (max. 250€ tolerated)
- No assets
- No obligations
- Tax clearance certificate
then you may also dissolve the company without a blocking year. This process typically takes around 3 months. Not all registry courts accept this path.
When do I need to file for insolvency instead?
If your company has debts it cannot pay, you must file for insolvency within 3 weeks. Failing to do so can lead to:
- Personal liability
- Possible criminal charges for delaying insolvency
The court appoints an insolvency administrator who manages the proceedings and creditor payouts.
What happens after the company is deleted from the register?
- Your liability as managing director ends
- No more accounting, tax filings, or IHK fees
- The company no longer legally exists
Need help closing your company?
We guide you through:
- Liquidation
- Fast-track closure (if eligible)
- Insolvency filing
- Tax coordination and final deregistration
In an initial consultation, we discuss how your GmbH or UG can be closed swiftly and efficiently.
