Aktiengesellschaft

Companies law
Basic forms:
Sole proprietorship
Partnership (General · Limited · LLP)
Corporation (LLC · S · C)
Cooperative
United States:
Business trust LLLP · Series LLC Delaware corporation Nevada corporation
European Economic Area, including European Union:
SE · SCE
United Kingdom / Commonwealth / Ireland:
Limited company (By shares · By guarantee) (Public · Proprietary) Community interest company
Civil law countries:
AB · AG · ANS · A/S · AS
K.K. · N.V. · OY · S.A. · GmbH
Doctrines
Corporate governance
Limited liability · Ultra vires
Business judgment rule
Internal affairs doctrine
De facto corporation and corporation by estoppel
Piercing the corporate veil
Rochdale Principles
Related areas of law
Contract · Civil procedure

Aktiengesellschaft (IPA: [\'aktsiəngəzεlʃaft]; abbreviated AG) is a German term that refers to a corporation that is limited by shares, i.e., owned by shareholders. It may be traded on a stock market. The term is used in Germany, Austria, and Switzerland. The United States equivalent term is "public company." The equivalent term in the UK is PLC. It is generally considered equivalent to an S.A. when comparing to other civil-law jurisdictions.

Several countries have similar forms of company: Italy (Società per Azioni, S.p.A.), Denmark (Aktieselskab, A/S), Norway (Aksjeselskap, AS), Sweden (Aktiebolag, AB), Slovakia (akciová spoločnosť, a.s.), the Czech Republic (Akciová společnost, a.s.), Serbia (akcionarsko društvo, a.d.), and Finland (Osakeyhtiö, OY), among others. All have names that more or less literally translate to "Aktiengesellschaft" (i.e. "share company"), although their structures differ (for instance, an Italian S.p.A. is closer to a French S.A. than a German AG).

Meaning of the word

Aktien means shares, and Gesellschaft means company.

Reasons for setting up a corporation

When a corporation is started, it often must collect a lot of money to pay for startup costs, and banks provide only a limited amount, especially if it is unknown whether that corporation is going to earn enough money to repay all the loans plus interest on time. However, some members of the public will take a risk and provide money in exchange for a piece of paper, or just a book entry, that can be sold to others on the stock market, and that has a value that fluctuates, depending on, for example, whether the shares concerned will pay dividends, and if so, how much per year, or what percentage of the current price of the shares. Also, shares usually come with voting rights, so shareholders can dictate the direction of the company, and the power one holds depends on the amount of shares that one possesses.

Legal basis

The legal basis of the AG is, in Germany and Austria, the respective Aktiengesetz (abbr. AktG), in Switzerland a part of the Obligationenrecht (OR). As the law requires all corporations to specify their legal form (which gives the limitation of liability) in the name, all German and Austrian stock corporations bear Aktiengesellschaft or AG as part (usually suffix) of their name.

See also

• Gesellschaft mit beschränkter Haftung (GmbH; limited liability company)
• Public limited company (the corresponding concept in the UK and in Ireland)
• S. A. (the corresponding concept in France, Spain and several other countries)
• Naamloze Vennootschap (the corresponding concept in the Netherlands and Belgium)
• Aktieselskab (the corresponding concept in Denmark)
• Aksjeselskap (the corresponding concept in Norway)
• Aktiebolag (the corresponding concept in Sweden)
• Osakeyhtiö (the corresponding concept in Finland)
• Societas Europaea (the corresponding concept for European companies in the European Union)
• Limited liability company

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