A shelf corporation is a corporation in which (in Germany) ownership is embodied in the ownership of shares. As a rule, each shareholder holds an equal share in the company, as evidenced by the listing of their shares. The shares can be transferred to other shareholders without affecting the continued existence of the company.

The capital structure of the company is determined by the articles of association, which set out each shareholder's ownership interest in the company. When people colloquially talk about buying an AG, they are referring to the acquisition and transfer of the shares.  

A public limited company consists by default of three institutions: the Annual General Meeting, the Management Board and the Supervisory Board.

The AG is managed autonomously by the Management Board. The Management Board may consist of one or more persons. The management board is appointed and supervised by the supervisory board. The Annual General Meeting in turn elects the Supervisory Board and, among other things, adopts resolutions on amendments to the Articles of Association. All investors can participate in the general meeting. The allocation of voting rights for resolutions and amendments to the Articles of Association is based on the proportion of shares held.

As with the GmbH, one of the advantages of the AG is the limitation of liability for the shareholders. In the event of the AG's insolvency, the investors' private assets remain unaffected; they only risk the loss of their capital contribution. This can be avoided by the strict separation of company assets and private assets of the shareholders should be made possible.

The transfer of company shares within an AG, i.e. shares, is relatively simple. Neither a form has to be observed, nor is a notarial certification necessary.

The legal form of the AG has a clear advantage in terms of external perception: it appears serious and professional and therefore enjoys a high reputation. The title "Management Board" on the business card usually makes a good impression on customers.

The AG can be founded by a legal entity, by partnerships with full legal capacity or by natural persons. All founders must make contributions, in return for which they take over shares. When an AG is founded, the memorandum of association, which also serves as the articles of association, is notarized.

The formation of an AG is divided into three stages:

1. Pre-incorporation company
2. Pre-AG
3. (registered in the commercial register) AG

In the period up to the notarial certification of the partnership agreement, a distinction is made between the pre-incorporation company, which is basically a partnership under civil law.

The pre-corporation or pre-AG exists from the notarial determination of the articles of association until the registration of this corporation in the commercial register. Sometimes this pre-AG already has legal capacity and the name of the company and the legal form suffix are supplemented by the abbreviation "i.Gr.". The management board, supervisory board and general meeting already exist within this pre-AG.

If the company is finally entered in the commercial register, it has full legal capacity as an AG.

The shares of a public limited company do not necessarily have to be traded on the stock exchange. Usually, only large public companies are listed on the stock exchange. Their shares can be traded publicly. Smaller and medium-sized companies often only issue shares to a few shareholders and exclude tradability.

The AG is subject to trade tax, corporate income tax and the solidarity surcharge, wage tax, sales tax and capital gains tax, if applicable.

If the profit is distributed to the shareholders, capital gains tax must be paid to the tax office. Since the AG is a different legal entity, losses in the AG cannot be claimed in the shareholders' private tax return.

An alternative is the Shelf GmbH (LTD)which can be established and managed with less effort than the AG.

Another alternative to the public limited company is the "Societas Europaea", also known as the "European AG", which we call the Shelf SE on offer have.

The AG and the GmbH / UG have some similarities, but are characterized by even more differences.

In both cases, the companies are legal entities that have their own legal personality and where the company is represented by executive bodies. Both forms of enterprise are corporations. The most important and biggest difference is the amount of share capital required. In the case of the GmbH, you need to hold 25,000 euros in share capital, while as an AG you need to prove that you have double the financial outlay of 50,000 euros in share capital. With the UG, even a single euro is sufficient for the foundation. 

One of the most important differences is that a shelf corporation must have at least three governing bodies: Management Board, Supervisory Board and General Meeting. The management board manages the shelf corporation on its own responsibility (§ Section 76 AktG) and, in contrast to a GmbH / UG, is not bound by instructions.

The share capital of the SE must be at least EUR 120 000. In other respects, the SE's capital, the increase and maintenance of capital and the conduct of business and the issue of securities shall be governed by the same provisions as those applicable to a public limited-liability company in the Member State in which the SE has its registered office.

The SE is limited to multinational companies, i.e. companies established in at least two European countries, either by merger, as a holding company, subsidiary or simply by the nature of their business.

The biggest difference results from the mixture of common law and civil law traditions. In contrast to the AG, the SE offers both a monistic (one-tier) and a dualistic (two-tier) form of administration, whereby the monistic has one administrative body and the dualistic functions like the AG model with administrative and supervisory bodies.