Aktiengesellschaft

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Aktiengesellschaft (German pronunciation: [ˈaktsiənɡəzɛlʃaft]; abbreviated AG) is a German word for a corporation that is limited by shares, i.e., owned by shareholders, and may be traded on a stock market. The term is used in Germany, Austria, and Switzerland. It is also used occasionally in Luxembourg (though the French-language equivalent, Société Anonyme, is more common) and for companies incorporated in the German-speaking region of Belgium.

Meaning of the word

The German word Aktiengesellschaft is a compound noun made up of two elements: Aktien meaning shares, and Gesellschaft meaning society, or, in this context, company. Other types of German companies also have shares, although these shares are called Anteile rather than Aktien. A similar distinction exists in other languages; for example, in Polish the two types of share are called akcja and udział, or in Spanish, acción and cuota.

Legal basis

In Germany and Austria, the legal basis of the AG is the German Aktiengesetz (abbr. AktG) or the Austrian Aktiengesetz (abbr. AktG). In Switzerland, it is contained within the Obligationenrecht (OR). The law requires all corporations to specify their legal form in their name which tells the public their limitation of liability, all German (required by § 4 Aktiengesetz) and Austrian stock corporations include Aktiengesellschaft or AG as part of their name, frequently as a suffix.

Structure

German AGs have a "two-tiered board" structure consisting of a supervisory board (Aufsichtsrat) and a management board (Vorstand). The supervisory board is generally controlled by shareholders, although employees may have seats depending on the size of the company. The management board directly runs the company, but its members may be removed by the supervisory board, which also determines the management board's compensation. Some German AGs have management boards which determine their own remuneration, but that situation is now relatively uncommon.

Similar forms

Several countries have similar forms of company:

• Denmark (Aktieselskab, A/S)
• Norway (Aksjeselskap, AS)
• Sweden (Aktiebolag, AB)
• Estonia (Aktsiaselts, AS)
• Latvia (Akciju sabiedrība, AS)
• Lithuania (Akcinė bendrovė, AB)
• Poland (Spółka Akcyjna, SA)
• Hungary (részvénytársaság, Rt. or since 2007 Zártkörűen működő részvénytársaság, Zrt. and Nyilvánosan működő részvénytársaság, Nyrt.)
• Slovakia (akciová spoločnosť, a.s.)
• Czech Republic (Akciová společnost, a.s.)
• Slovenia (delniška družba, d.d.)
• Republic of Macedonia (акционерско друштво, akcionersko drushtvo, АД)
• Serbia (akcionarsko društvo, a.d.)
• Croatia (dioničko društvo, d.d.)
• Ukraine (Відкрите Акціонерне Товариство, Vidkryte Aktsionerne Tovarystvo, ВАТ)
• Romania (Societate pe Acţiuni, s.a.)
• Bulgarian (Акционерно дружество, АД)
• Russia (Открытое акционерное общество, Otkrytoie Aktsionernoie Obshchestvo, OAO)
• Finland (Osakeyhtiö, OY)
• Greece (Anonimi Etaireia / Ανώνυμη Eταιρεία, AE)
• Turkey (Anonim Şirket, A.Ş.)
• Spain (Sociedad Anónima, S.A.)
• Brazil (Sociedade Anônima, S.A.)
• Portugal (Sociedade Anónima, S.A.)

All aforementioned company forms have names that more or less literally translate to "Aktiengesellschaft" (for meaning see above), although their structures differ (for instance, an Italian S.p.A. is closer to a French S.A. than to a German AG).

The form is roughly equivalent to the “public limited company” (plc) in the United Kingdom and Republic of Ireland, to the “publicly held/open corporation” in the United States, to the naamloze vennootschap in the Netherlands and Belgium, to the Perseroan Terbatas in Indonesia, to the S.A. in Spain, France, Portugal and other civil-law jurisdictions, and to the Societas Europaea in the European Union.

See also

• Gesellschaft mit beschränkter Haftung (GmbH; limited liability company)
• Limited liability company (LLC) - United States
• Public limited company (PLC) - United Kingdom
• S.A. - a type of corporation in various countries
• S.p.A., or Società per Azioni, the Italian word for joint-stock company
• Types of business entity

Further reading

• Fohlin, Caroline (November 2005). "Chapter 4: The History of Corporate Ownership and Control in Germany". In Morck, Randall K. A History of Corporate Governance around the World: Family Business Groups to Professional Managers. University of Chicago Press. pp. 223–282. ISBN 0-226-53680-7. 
• Franks, Julian; Colin Mayer (2001). "Ownership and Control of German Corporations". The Review of Financial Studies (Oxford University Press) 14 (4): 943–977.