What Is AG (Aktiengesellschaft)? Definition, Meaning, and Example
Aktiengesellschaft, which is the German word for a public limited company, is referred to as AG. Public stock exchanges trade and offer this kind of corporation shares to the general public. The liability of shareholders is restricted to their investment. The shareholders’ assets are safeguarded in the event of insolvency and are not liable for the company’s debts.
Knowledge of Aktiengesellschaft
The German word for a corporation is ” Aktiengesellschaft,” which combines the words for shares. An AG is a company that shareholders own, which is tradable on a stock exchange. Informally organized general meetings are where shareholders can regulate policies. The managing board makes all operational decisions, and the supervisory board implements those decisions.
Publicly traded German enterprises are identified as such by the initials ‘AG’ following the company name. The abbreviation ‘AG’ stands for the German phrase Aktiengesellschaft, which in English is equivalent to the words stock corporation’ or shares corporation. On stock markets, AG firms are publicly traded, with the DAX serving as the primary trading venue for most of them.
The German AG’s automakers comprise some of the biggest companies:
- AG Volkswagen
- AG Daimler
- BMW AG
The creation of an AG
An AG must have five or more members to be established. The Stock Corporation Act (SCA) applies to Aktiengesellschafts (AG). Share capital for this act totals about $56,000, of which at least half was paid at registration. The business owner will hire an attorney or bank to help with the papers needed for registration.
The goal of the business will be the inspiration for the name of the Aktiengesellschaft, which includes the word Aktiengesellschaft in its title. The corporation’s name, registration address, share capital, each shareholder’s contribution, and information about the shares are all listed in the articles of association. A court or notary will authenticate the articles of association.
The necessary funds are transferred into a bank account, and the notarized paperwork and application are delivered to the Commercial Registry Office. The AG can operate legally after seven days if all the paperwork is in order. The office will issue a registration certificate, and notification of the establishment will be published in the Swiss Official Gazette of Commerce.
AG Monitoring
The supervisory board of an AG, which consists of three or more members, appoints and oversees the managing board, which consists of one or more members. There are two or more managing board members in an Aktiengesellschaft (AG) with a share capital of $3 million or more. Employee representatives will make up one-third of the supervisory board of an AG with over 500 employees. If there are over 2,000 employees, employee representatives will make up half of the board. The articles of association may also restrict the number of members.
Auditors examine the corporation’s financial records. An ordinary corporate audit is necessary if three or more of the following requirements are met for two or more years: the business employs more than 50 full-time staff, its annual revenue surpasses $2 million, or its balance sheet shows more than $100,000.
AG vs. GMbH
Another common corporate abbreviation that is most frequently used in Germany is GmbH. Germany categorizes businesses into two groups, publicly traded and privately held, similar to most other nations. While GmbH denotes some private businesses and is written after a company’s name, AG refers to public companies. The initials GBL stand for Gesellschaft mit beschränkter Haftung, which is German for “limited liability company.”
Conclusion
- German stock markets refer to publicly traded companies as Aktiengesellschafts.
- These letters are used after the name of such public limited liability firms and are abbreviated as “AG”.
- Companies certified as AG are subject to more stringent regulatory scrutiny and must meet several initial and ongoing standards to keep their designation.
