Aktiengesellschaft
The
German term
Aktiengesellschaft (
IPA /'aktsiəngəzεlʃaft/) (abbreviated
AG) means a
corporation which is limited by
shares,
i.e., owned by
shareholders. It may be traded on the
stock market. The term is used in
Germany,
Austria and
Switzerland.
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.
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.
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.
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Gesellschaft mit beschränkter Haftung (GmbH; limited liability company)
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Public limited company (the corresponding concept in the UK and in Ireland)
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S. A. (the corresponding concept in France, Spain and other Romanic countries)
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Naamloze Vennootschap (the corresponding concept in the Netherlands)
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Aktiebolag (the corresponding concept in Sweden)
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Osakeyhtiö (the corresponding concept in Finland)
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Limited liability company
