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'Aktiengesellschaft' (; 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), the Czech Republic (''Akciová společnost'', a.s.), 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).

Contents

Meaning of the word

Reasons for setting up a corporation

Legal basis

See also

Meaning of the word

''Aktien'' means shares, and ''Gesellschaft'' means business association in this context.

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)

★ Aktieselskab (the corresponding concept in Denmark)

★ 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