Information AboutAktiengesellschaft |
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| german law | |
| austrian law | |
| swiss law | |
| types of companies | |
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The German term Aktiengesellschaft ( IPA /'aktsiəngəzεlʃaft/) (abbreviated '''AG''') means a Corporation which is limited by Share s, ''i.e.'', owned by Shareholder s. It may be traded on the Stock Market . The term is used in Germany , Austria and Switzerland . MEANING OF THE WORD ''Aktien'' means Shares , and '' Gesellschaft '' means business association in this context. Thus, the term refers to a company which procures its financial means from shares traded in the Stock Market , i.e, a publicly-traded 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 Dividend s, and if so, how much per year, or what percentage of the current price of the shares. 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
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