Modernization of commercial and corporate law: Online formation of GmbH and UG possible without a visit to a notary's office

I. What was changed?

Since 01.08.2022, it has been possible for (future) shareholders to establish a GmbH as well as a UG (limited liability company) online. It is also possible to certify commercial register applications online, for which a visit to the notary was previously necessary. Further parts of the Act Implementing the Digitalization Directive (DiRUG) will come into force on 01.08.2023.

Online notarization

The mandatory notarization of a partnership agreement can be carried out online via video communication since August 2022. The shareholder resolutions passed and the appointment of the first managing directors can also be carried out online.
The process essentially takes place in three steps:

1. The parties involved must verify their identity in a two-stage procedure in accordance with Section 16c of the German Notarization Act (BeurkG). First, electronic identification is performed using the ID document with eID function. Then the photo on the ID is read electronically and compared by the notary with the image of the person connected.
2. The notary then draws up an electronic record of the online hearing (Section 16b BeurkG).All parties involved sign the electronic record with a qualified electronic signature (Section 16b (4) BeurkG).

Online certification of the commercial register application

An electronic signature that has been publicly certified with an electronic certificate is now sufficient for the notarial certification of the commercial register application. Online applications for entry in the relevant registers of cooperatives, partnerships and, from 2023, associations will also be possible by video communication. The procedure for this is essentially the same as for online notarization.II. What is the aim of the modernization measure?
The background to the law is the EU Digitization Directive (2019/1151/EU), the aim of which is to bring about simplification in the area of cross-border incorporation of companies using digital tools.

III. what is to be observed?

It should be noted that private providers of video communication systems, such as Zoom or Skype, are not permitted. Instead, a system provided by the Federal Chamber of Notaries and specially secured must be used. Only corporate resolutions that do not require notarial form are possible by video communication via private providers, unless they are expressly prohibited by the articles of association and if all shareholders have given their consent in text form.

IV. What expansions are expected in 2023?

Currently, online certification is only possible for companies whose shareholders provide the share capital as a cash contribution. From August 2023, this option will also be extended to formations with partial or exclusive contributions in kind. Also, the Act Supplementing the Regulations for the Implementation of the Digitalization Directive (DiREG) extends the possibility of online notarization to powers of attorney for the formation of companies, corporate actions and unanimously adopted resolutions to amend the articles of association.

V. What does this mean for practice?

Shareholders who are located in various places around the world no longer have to appear in person before a notary public in every case. However, the new regulations largely only cover resolutions that are required for the formation of a GmbH or UG. Most subsequent measures requiring notarization, such as a change of legal form or dissolution, are still not possible online.

VI. PBC legal takeaway

As a result of the new regulations, you as a (future) shareholder can save yourself costs, time and effort through notarial online procedures when forming companies.
You are welcome to contact us at any time with queries about the new online procedures or if you would like advice.