Economic importance : chapter 1

• Author: Christoph Jaehne
• DOI: 10.10520/EJC74094
• Date: 01 January 2008
• Published date: 01 January 2008
• Pages: 3-6

3

CHAPTER 1

ECONOMIC IMPORTANCE

1.1 Introduction

In this chapter statistical data will be supplied to show the relevance

of these two legal forms within their respective economies. GmbH and

close corporation are the preferred instruments for entrepreneurs

wishing to use as legal form one with, i.a., limited liability.

1.2 Important role in respective economies

Both the GmbH as well as the close corporation play an important role in

their respective economies. This is not necessarily a surprise, be cause

according to Butler, President of Columbia University, “the limited liability

company is the greatest single discovery of modern times. Even steam

and electricity are less important than the limited liability company”.1

In Germany, the GmbH is by far the most popular form of incorporated

business entities. While at the end of 2001 approximately 13,598

‘Aktiengesellschaften’2 existed, the number of GmbHs was approxi-

mately 935,005.3

Impressive was the signif‌icant rise in numbers due to German Unif‌i cation.

On 31 December 1992 there were about 3,200 “Aktiengesellschaf-

ten” (including Komman ditgesellschaft auf Aktien4). AG and KGaA

possessed a stock capital of about 174 million DM. The year before,

1 Cited according to Dine/Hughes, EC company law, Looseleaf collec-

tion, 2004, 1 (1).

2 Abbreviated AG. In general it resembles a public (limited) company. In

the Anglo-American legal context it is also referred to as a joint stock

company.

3 Regarding the f‌igures, see Hansen, "Der gestiegene wirtschaftliche

Stellenwert der GmbH", 2004, GmbHR 39, 41. Cf. for recent develop-

ments, see also Hansen, “Die Rechtsformen deutscher Unternehmen

und ihr wirtschaftliches Gewicht”, 2003, GmbHR 22 et seqq.; “Die GmbH

als weiterhin umsatzstärkste Rechtsform”, 2002, GmbHR 148 et seqq.;

“Fast die Hälfte der steuerpf‌lichtigen Umsätze entfallen auf die GmbH

und GmbH & Co. KG”, 2001, GmbHR 24, 286 et seqq. Note that after

1993 the ‘Statistisches Jahrbuch für die Bundesrepublik Deutschland’,

(Statistical Yearbook FRG) stopped covering the registration according

to a differentiation between companies, and now registers them. ac-

cording to the number of employees, Statistical Yearbook FRG (1999),

7.0 introduction. Regarding the situation in the former East Germany

after unif‌ication, see Baumbach/Hueck, GmbHG introduction, note 22.

4 Abbreviated KGaA. This legal form can be explained as company limited

by shares.