Founders' Guide
German accounting for startups: what begins at incorporation
Founding a German GmbH or UG brings statutory accounting duties from day one. This guide is for foreign founders: it explains what obligations start at incorporation, why your first year is almost always the micro size class, and how to get the first Jahresabschluss done without overbuilding.
Last reviewed: 2026-07-03
Accounting duties begin the day you incorporate
A GmbH or UG (haftungsbeschränkt) is a merchant (Kaufmann) by legal form. From formation you must keep double-entry commercial books (§ 238 HGB) and prepare an opening balance sheet (Eröffnungsbilanz) at the start of the business, then a full Jahresabschluss at each year-end (§§ 242, 264 HGB).
There is no grace period. Unlike a small sole trader, a corporation cannot rely on the § 241a HGB exemption from double-entry accounting; the duty applies from the first day regardless of turnover.
Your first-year size class: almost always micro
Size classes under § 267 / § 267a HGB run on balance sheet total, revenue and employees. A new company almost always starts as a Kleinstkapitalgesellschaft (micro): ≤ €450,000 balance sheet total, ≤ €900,000 revenue, ≤ 10 employees on average.
Micro status brings real relief: an abbreviated balance sheet, a shortened GuV, no Lagebericht, no audit, and the option to omit the Anhang entirely if you show a few figures beneath the balance sheet (§ 264 Abs. 1 Satz 5). You can even deposit (hinterlegen) a shortened balance sheet rather than publish it (§ 326 Abs. 2). Because size class is tested over two consecutive years (§ 267 Abs. 4), a fast-growing startup keeps its reliefs until it has been over the threshold twice.
What you have to set up
- A chart of accounts — typically the German standard SKR03 or SKR04.
- An opening balance sheet (Eröffnungsbilanz) reflecting the paid-in share capital.
- Ongoing double-entry bookkeeping producing a monthly trial balance (Saldenliste).
- VAT registration and periodic advance returns (Umsatzsteuer-Voranmeldung) where applicable.
- A defined financial year (often the calendar year for a new entity).
- A year-end process to turn the trial balance into the statutory Bilanz, GuV and, if not omitted, the Anhang.
Your first Jahresabschluss
Components
At minimum a Bilanz (§ 266) and GuV (§ 275). As a micro entity you can omit the Anhang if you disclose the required figures under the balance sheet (§ 264 Abs. 1 Satz 5).
Deadlines
Micro and small entities prepare within 6 months of year-end (§ 264 Abs. 1) and file within 12 months (§ 325). Miss it and the Bundesamt für Justiz fines from €2,500 (§ 335).
No audit
Micro and small startups are not subject to a statutory audit (§ 316 HGB), so you can prepare and file without a Wirtschaftsprüfer.
Language
The filing is in German and euros (§ 244). An English convenience translation helps a foreign founder review it, but the German document is what is filed.
UG specifics
The UG (haftungsbeschränkt) is a GmbH variant with low minimum capital. Its accounting is the same as a GmbH's, with one addition: it must allocate a quarter of its annual profit to a statutory reserve until subscribed capital reaches €25,000 (§ 5a Abs. 3 GmbHG), at which point it can convert to a regular GmbH.
Otherwise, treat the UG exactly like a micro GmbH for statutory purposes — same components, same deadlines, same reliefs.
Frequently asked questions
What accounting must a new German GmbH do from day one?
Keep double-entry commercial books (§ 238 HGB), prepare an opening balance sheet at formation, and prepare a full Jahresabschluss at each year-end (§§ 242, 264 HGB). The duty applies immediately, regardless of turnover.
What size class is a startup GmbH in the first year?
Almost always micro (Kleinstkapitalgesellschaft, § 267a HGB): under €450,000 balance sheet total, €900,000 revenue and 10 employees. That brings an abbreviated balance sheet, no audit and the option to omit the Anhang.
Does a UG have to file annual accounts too?
Yes. A UG (haftungsbeschränkt) is a corporation and files exactly like a GmbH, with the added duty to build a statutory reserve from 25% of profit until capital reaches €25,000 (§ 5a Abs. 3 GmbHG).
When is the first Jahresabschluss due?
A micro or small startup prepares within 6 months of the balance sheet date (§ 264 Abs. 1 HGB) and files with the Unternehmensregister within 12 months (§ 325 HGB).
Do we need an audit as a startup?
No. Micro and small corporations are not subject to a statutory audit (§ 316 HGB). An audit only becomes mandatory if you grow into the medium size class over two consecutive years.