Acquiring a Shelf Company — Step by Step

This section covers only the acquisition of a genuine shelf company — a GmbH that has never traded since its incorporation. Acquiring a dormant company requires separate assessment and is not covered here.

Step 1: Selecting a provider and reserving a company

Shelf companies are available from specialist providers, law firms and notaries. When choosing a provider, watch for reliability: a total price below the minimum share capital of EUR 25,000 is a clear warning sign.

Once you have selected a suitable company, you submit a reservation request to the provider, who will supply a pre-contract and initial company documents — in particular the Commercial Register extract and the deed of formation.

Before releasing the company documents, any reputable provider will run its own KYC (know-your-customer) process on the buyer. You will typically need to provide:

• Proof of the buyer's identity (for legal entities: a Commercial Register extract showing the beneficial owner clearly; for individuals: a valid identity document)
• Details of the new managing directors
• The name of the notary and the person holding the power of attorney
• The new company name and the future business address

Step 2: Due diligence

A thorough legal and tax review of the shelf company is essential before purchase. The due diligence should cover in particular:

• Commercial Register extract: review the company's formation history, the registered managing directors and any entries recording liabilities or insolvency proceedings
• List of shareholders: confirm that the provider holds the shares in full and free of encumbrances (§ 16 GmbH Act)
• Tax clearance certificate: confirm that there are no outstanding tax liabilities
• Transparency Register: check the current filing
• Bank statements and provider's declaration of non-trading: confirm that no liabilities have been incurred

Step 3: Securing payment of the purchase price

The share transfer takes effect immediately on completion of the notarisation. The purchase price must therefore be secured before the notarisation appointment. On acquisition, the new managing director immediately gains disposal over the fully paid-up share capital.

The following options are typically available to secure the purchase price:

• Advance payment of the purchase price to the provider before the notarisation appointment
• Payment of the purchase price into an escrow account held by a lawyer or notary before notarisation
• A guarantee declaration (Gutsagung) given by the buyer's lawyer or notary to the provider

Step 4: Powers of attorney and identity documents

For German legal entities, a simple written power of attorney suffices. Foreign shareholders face additional requirements, which must be agreed with the notary in advance.

Foreign buyers will typically need to prepare the following:

• A certified power of attorney from the signatory on the buyer's side
• Proof of the foreign parent company's existence: a company register extract or certificate of incorporation
• Proof of authority to represent: evidence that the person granting the power of attorney has authority to represent the parent company (for example, a certificate of company secretary or a register extract)
• Apostille or legalisation of the above documents, and a certified translation where required

Step 5: The notarisation appointment

The notarisation appointment covers three sequential stages. Since the buyer is not yet entered in the list of shareholders at the time of notarisation, the recommended sequence is:

1. Change of managing director by the provider acting as current sole shareholder (a simple written shareholders' resolution, no notarisation required): appointment of the new managing director, removal and discharge of the previous managing director. (§ 46 no. 5 GmbH Act)
2. Notarised articles amendment by the provider acting as current sole shareholder: adaptation of company name, registered office and objects of the company. (§§ 53, 54 GmbH Act)
3. Notarised share purchase and transfer agreement: transfer of the share to the buyer. On completion of this step, the buyer immediately becomes a shareholder of the GmbH. (§ 15(3), (4) GmbH Act)

The application to the Commercial Register must be signed in person before a notary by the new managing director, whose signature must be officially certified. All future members of the management should therefore attend the notarisation appointment. (§ 12 Commercial Code)

Step 6: Disclosure of the economic re-establishment

The Commercial Register application following a shelf company acquisition must include a disclosure of the so-called economic re-establishment (wirtschaftliche Neugründung). The new managing director must declare that the company's assets at the time of filing equal at least the share capital less any pre-existing liabilities. (Federal Court of Justice, judgment of 9 December 2002 — II ZB 12/02; Federal Court of Justice, judgment of 6 March 2012 — II ZR 56/10)

The Federal Court of Justice treats the first taking-up of business by a shelf company as equivalent to a fresh incorporation. The declaration that the share capital is freely at the managing director's disposal is therefore mandatory, by analogy with the rules on new incorporations. (§ 8(2) GmbH Act, applied by analogy)

Step 7: Signing authority and bank account transfer

Immediately after notarisation, the new managing director must update the signing authority at the company's bank. This usually requires a personal visit to the branch, together with proof of appointment (a shareholders' resolution or a current Commercial Register extract). The account transfer requires the new managing director to be already entered in the Commercial Register.

Providers typically work with two models for transferring the share capital:

• Account takeover: the new managing director attends the bank after the acquisition, completes the bank's KYC process and, if successful, gains full access to the existing company account and its share capital.
• Order cheque: where the account is not available for takeover or the bank's KYC check fails, the provider issues an order cheque for the amount of the share capital. The new managing director can deposit this cheque into a newly opened business account at a bank of the managing director's choice.

Where the share capital is to be transferred to a different bank, the recommended sequence is: open the new account first, transfer the balance, then close the original account.

Step 8: Post-acquisition compliance

After the amendments are entered in the register, the same compliance obligations apply as on a new incorporation:

• Update the Transparency Register filing to reflect the new beneficial owner — this obligation arises immediately on the share transfer, not on the Commercial Register entry (§ 20 Anti-Money Laundering Act)
• Notify the tax office of the change of shareholder (§ 138 Fiscal Code)
• Register the trade with the trade licensing authority (§ 14 Trade Regulation Act)