UG & GmbH day to day · 4.5
Why must a UG build up reserves?
Short answer
Because a UG is permitted to start with very little share capital (Stammkapital), it must build up capital: one quarter of its annual net income (Jahresüberschuss) goes into a statutory reserve. This applies until it has increased its share capital to that of a GmbH.
Key points
- The basis is the annual net income (Jahresüberschuss), reduced beforehand by any loss carryforward (Verlustvortrag) from previous years.
- The reserve may only be used for two purposes: a capital increase from company funds or offsetting losses.
- It is not a separate bank account. The money can work in the business; it simply cannot be distributed.
- The reserve does not save taxes: the UG pays taxes on the full profit.
- Once the reserve combined with the share capital reaches €25,000, the UG can increase its capital from it and is exempt from the special rules.
Figures & thresholds (as of November 2026)
- Reserve: 25% of the annual net income (after deducting any loss carryforward)
- Target: share capital of €25,000
Legal basis
§ 5a Abs. 3 und 5 GmbHG§ 57c GmbHG
Continue
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- Related: UG or GmbH: What is the Difference?
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