How to transfer money to your own GmbH? Entrepreneurs often ask this question when they realize that on the one hand their company could perform significantly better with more liquid funds, on the other hand the money is also practically at hand in the private account, so that no debt financing is necessary. We present the three options capital increase, capital reserve and shareholder loans and analyze which variant is the most sensible.

1. Transfer money to your own GmbH – Introduction

With a GmbH, entrepreneurs have many freedoms to achieve tax-favorable conditions for themselves and their company. It is always assumed that the associated tax arrangements should provide protection against excessive taxation of profits.

This time it is the other way round. Today we want to think about a GmbH that needs money. The money should come from the private assets of the partner. This is a far from banal process. As a rule, GmbH shareholders have three different ways in which they can increase the liquidity of their GmbH – from their own funds. We now introduce them to you and also reveal which option is recommended from a tax point of view.

2. Transferring money to own GmbH: share capital

2.1. How to transfer money to the share capital of your own GmbH

Let’s start with the most obvious alternative, the increase in share capital. To do this, we need to change the social contract. However, this requires a notarized deed. In addition, an increase in the share capital is a process that requires publication. In other words, the increase in share capital must be registered with the commercial register. This is actually an advantage, because then all outside circles interested in the finances of the GmbH can easily inform themselves about the situation of the company. In addition, the share capital of a GmbH is the most solid basis with which the financial strength of the company can be expressed. For potential creditors among business partners, this is the gold standard.

2.2. Disadvantages of increasing the share capital

However, this procedure also has some disadvantages. First of all, this requires the paid walk to the notary. Furthermore, registration with the commercial register takes some time until the capital increase becomes public. Compared to the next point, however, these are small things. Because if one day the GmbH is to be sold or liquidated, then the contribution to the share capital is also subject to profit taxation, albeit indirectly.

But even if you want to withdraw the money from the GmbH in the meantime via a capital reduction in accordance with § 58 GmbHG, this is quite expensive. So first of all a blocking period of one year must be adhered to before you can get the money. The deadline serves to give potential creditors the opportunity to have their claims settled. The capital reduction means for creditors the risk that the financial coverage of their claims is at risk. Only after the deadline can the GmbH publish its new, reduced share capital in the commercial register.

For this, you have to seek out a notary for a new statute change, which again costs money and time. Furthermore, this process is subject to strict tax regulations. Thus, in such processes, a certain order of use must be observed for tax purposes. However, this is a very complex process. In principle, it is about the fact that according to the law you can only distribute the money from the GmbH, which are taxable. Only then do you get to share capital. After all, taking money from the share capital is tax-free.

In conclusion, you first pay net over-taxed money into the GmbH and then you also have to pay taxes in the end to get the money. Not to mention the considerable administrative burden that has to be made for this. In addition to the notary, you should also consult a tax consultant in order not to make any mistakes in the order of use.

3. Transferring money to own GmbH: Capital reserve

Well, if you want to keep the money to be paid out of the share capital, then there is still the capital reserve as an option. Finally, the main purpose of capital reserves is to raise funds imported into the GmbH from outside – both money and other assets. Thus, it is practically predestined for payments by its own shareholders. In this respect, the capital reserve, as part of the equity of a balance sheet, constitutes a supplement to the profit reserve, which is reserved exclusively for the self-created assets, i.e. for their profits saved.

How does the payment into the capital reserve work? Anyone who wants to transfer money to their own GmbH and aims at the capital reserve must first make a shareholder resolution. This enables a relatively uncomplicated payment into the capital reserve of your own GmbH. At least you do not need a notarized notarization for this.

But at the latest when the capital reserve is paid out, the challenges begin. In this case, too, a use sequence is legally prescribed. This also means that you must first distribute all accumulated profits from the GmbH before you can achieve a tax-free payment from the capital reserve. Tax law is rigorous.

After all, the capital reserve is also an expression of the financial situation of the GmbH. It also appears in the balance sheet, so that business partners can get a fairly accurate picture of the GmbH. Therefore, this is a quite interesting option to transfer money to your own GmbH.

4. Transfer money to own GmbH: Loans

The third option that we would like to present to you is the provision of a loan from private. Also here you can transfer relatively uncomplicated money to your own GmbH. For this, a simple loan agreement and the transfer from the private account to the GmbH is sufficient. However, one must then also consistently adhere to the contractually predetermined conditions. Otherwise, one risks that the tax office rather assumes a hidden deposit – and then treats it accordingly under tax law.

If you consider these aspects, however, the granting of a loan to your own GmbH is a very interesting option. Because the repayment from the GmbH can be done both tax-free and – this is the big difference to the two other alternatives – without having to consider a use order. Moreover, neither a notarial deed nor an entry in the commercial register is required.

However, a shortcoming remains with the loan option. Thus, the liability of the GmbH towards its shareholder is an item that must be accounted for. Potential creditors can therefore see that the GmbH has debts with its shareholder, which may not be a good sign of financial solidity. However, if you grant the loan as a subordinated loan, this is a much more positive sign for business partners. For third parties, it means that in the event of liability, the loan is less priority than their own claim against the GmbH. Thus, the loan gains almost the same importance as the share capital or the capital reserve.

5. Transfer money to your own GmbH – Conclusion

Now let's see what conclusions we can distill from our presentation. First of all, all three designs are suitable for transferring money to your own GmbH. However, all three variants have different advantages and disadvantages. These are of great importance for deciding which approach you want to use to transfer money to your own GmbH.

Significant advantages and disadvantages of a capital increase

Increasing the share capital has the advantage of representing the highest solidity of the company. But both the effort to make the contribution to the share capital and the subsequent deduction from it is enormous. In addition, the later payment is practically linked to a taxation of saved profits. This is therefore a tax disadvantage.

Significant advantages and disadvantages of a payment into the capital reserve

The payment into the capital reserve is already easier to accomplish. The external impact on business partners is also fundamentally sound, albeit somewhat less than in the case of the capital increase. But at the latest when withdrawing the money from the capital reserve, you must also pay attention to the order of use, i.e. taxes on saved profits. Only if there are no such profits in the GmbH, this may make sense for the options share capital and capital reserve. However, in such a situation, the deduction of capital does not seem to make much sense.

Significant advantages and disadvantages of a loan

With a loan, however, as a GmbH shareholder, it is easiest to transfer money to your own GmbH. Because both the conclusion of the loan agreement with the own GmbH as well as the repayment and the interest can be designed individually. Nevertheless, you have to pay attention to some points, so that no hidden deposit arises. And the repayment has the great advantage that it also remains tax-free. It is only when it comes to external effects that you have to accept cuts, but even for that you can find a solution.

5.4. Our conclusion