Limited liability companies (GmbHs) in Germany are required to fulfill certain legal obligations—including preparing an annual balance sheet. In this article, you will learn what a GmbH balance sheet is and why it is important. We also explain which businesses must create or publish one and how to do so. Additionally, you will find information about where third parties can view the statements of a GmbH.

What’s in this article?

• What is a GmbH balance sheet?
  
• Example of a GmbH balance sheet
  
• Why do GmbHs have to prepare a balance sheet?
  
• Who has to prepare a GmbH balance sheet?
  
• Which items have to be included on a GmbH balance sheet?
  
• Do businesses have to publish their GmbH balance sheets?
  
• Where can third parties view a GmbH’s balance sheet?
  

What is a GmbH balance sheet?

In Germany, GmbHs are obligated to prepare annual financial statements consisting of at least two parts: a profit and loss (P&L) account and a balance sheet. Depending on the company’s size, the year-end records can also include a management report and an appendix. Together these documents provide an overview of profits or losses as well as total assets and liabilities of the GmbH. They are based on double-entry bookkeeping and are drawn up from the P&Ls.

The balance sheet of a GmbH is a comprehensive representation of the business’s assets, financial position, and earnings at a specific point in time. It must be prepared per the provisions of the German Commercial Code (HGB) (see, among other resources, Sections 242, 243, 264, and 266 of the HGB).

The balance sheet is divided into assets and liabilities. The assets side lists long-term items such as real estate, machinery, and intangible goods, plus short-term items such as bank balances, receivables, cash, and inventory.

The liabilities section shows shareholders’ equity and external funding. Profit or loss from the income statement is recorded here as well. The current year report is compared to the opening balance sheet of the GmbH at the time of its incorporation or the start of the fiscal year.

Example of a GmbH balance sheet

Below is a simple example of a fictitious GmbH balance sheet, which follows the structure of Section 266 of the HGB:

The asset column shows where funds are used, while the liabilities column shows their sources. Since the totals of both sides are identical, the balance is even.

Why do GmbHs have to prepare a balance sheet?

The balance sheet of a GmbH is a key element of financial reporting and fulfills several important functions.

Overview of the financial situation

As part of the annual financial statements, the GmbH balance sheet ensures a transparent and objective picture of the business’s fiscal health. The detailed overview of resources and debts lets banks, investors, and suppliers assess economic stability and solvency. Since the shareholders of a GmbH are not legally responsible for liabilities with their private assets, third parties need to be able to evaluate the financial situation realistically.

Ensuring proper accounting

In addition, the balance sheet meets legal requirements that ensure that the GmbH, as a corporation, maintains proper accounting records. This visibility protects creditors and partners, who depend on the business’s financial stability.

Basis for taxation

Furthermore, the tax offices use the information to determine the business’s tax burden. Properly preparing and disclosing the balance sheet ensures that GmbH meets its tax obligations.

Monitoring and controlling finances

Finally, management uses the data to identify risks early, avoid liquidity bottlenecks, and develop long-term corporate strategies.

Who has to prepare a GmbH balance sheet?

In principle, every GmbH, regardless of size, is legally obliged to prepare a balance sheet. However, smaller entities benefit from extended deadlines and simplifications regarding the necessary content and publication requirements when preparing their annual financial statements. The basis for this is the Micro-Capital Companies Accounting Law Amendment Act, or Micro-Balance Sheet Act for short (MicroBilG). The government distinguishes four size classes in Sections 267 and 267a of the HGB:

For someone to be classified into one of four size classes, at least two of the three criteria must be met.

Which items have to be included on a GmbH balance sheet?

Micro and small GmbHs benefit from simplified requirements for preparing statements by Section 266 of the HGB. A micro GmbH only needs to list the following items on its balance sheet:

Asset side

• Noncurrent assets
  
• Current assets
  
• Deferred income
  
• Deferred tax assets
  
• Excess amount from asset allocation
  

Liabilities side

• Equity capital
  
• Reserves
  
• Liabilities
  
• Deferred income
  
• Deferred tax liabilities
  

Small GmbHs must list the following items on their balance sheet:

Asset side

• Noncurrent assets
  
  • Intangible assets
    
  • Tangible assets
    
  • Financial investments
    
• Current assets
  
  • Inventory
    
  • Receivables and other assets
    
  • Securities
    
  • Cash on hand, checks, bank balances, and Bundesbank balances
    
• Deferred income
  
• Deferred tax assets
  
• Excess amount from asset allocation
  

Liabilities side

• Equity capital
  
  • Subscribed capital
    
  • Capital reserve
    
  • Retained earnings
    
  • Profit/loss carried forward
    
  • Annual profit/loss
    
• Reserves
  
• Liabilities
  
• Deferred income
  
• Deferred tax liabilities
  

In comparison, medium-sized and large GmbHs must break down the individual items in greater detail.

Management report

Medium-sized and large GmbHs must include a management report and annual financial statements. This document describes the economic situation, highlights important events of the financial year, and identifies potential risks (see Section 289 of the HGB).

Appendix

An appendix must also be attached, depending on the size of the GmbH. It supplements the year-end report with qualitative and quantitative information that facilitates the classification of the P&L and the GmbH balance sheet. This includes information on calculation methods and additions to individual items. The required components of the appendix are listed in Paragraphs 284 to 288 of the HGB. While large GmbHs must submit a complete application, medium-sized and small businesses can submit an abbreviated version. Micro GmbHs can forgo the appendix if they include certain supplemental disclosures—e.g., certain liabilities, loans, and advances.

Involvement of auditors

Medium-sized and large GmbHs also have another legal obligation: neutral auditors must prepare the annual financial statements and check whether all the rules and regulations are followed. This obligation does not apply to micro and small GmbHs.

Stripe Revenue Recognition can help prepare your balance sheets by automating and configuring sales reports with just a few clicks. Stripe Sigma also allows you to evaluate your data in the Stripe Dashboard, create customized analyses, and identify trends and patterns early on.

Do businesses have to publish their GmbH balance sheets?

In Germany, a GmbH must publish its balance sheet as part of its annual financial statements (see Section 325 of the HGB). Special transparency obligations apply to corporations: the public, creditors, and business partners must be able to review the GmbH’s balance sheet. As a result, they must publish their year-end reports in the electronic Federal Gazette and the Company Register within 12 months of the balance sheet date. Third parties can, therefore, view this without restriction.

Smaller businesses benefit from some relief in their disclosure obligations. According to Section 326 of the HGB, small entities only have to submit the report and the appendix, not the P&L. Micro GmbHs file only the statement and can request mere filing instead of full publication; access is only possible for a fee.

If balance sheets are not submitted for publication or are not filed promptly, the GmbH can be fined between €2,500 and €25,000 by Section 335 of the HGB.

Where can third parties view a GmbH’s balance sheet?

Creditors, business partners, investors, and interested third parties can view a GmbH’s balance sheet in the Company Register and the Federal Gazette.

The Company Register is the central platform for making company data accessible to the public. Information subject to publication—including the annual financial statements of GmbHs—can be easily accessed at unternehmensregister.de.

The second place to view GmbH balance sheets and published annual financial records is the Federal Gazette. The Federal Ministry of Justice publishes it as the official publication and announcement organ of the Federal Republic of Germany. Published annual financial statements can be viewed at bundesanzeiger.de.