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Aktiengesellschaft (IPA: ['aktsiəngəzεlʃaft]; abbreviated AG) is a German term that refers to 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.
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Meaning of the word
The German word Aktiengesellschaft is a compound noun made up of two elements: Aktien meaning shares, and Gesellschaft meaning company. However to translate it as "share company" is misleading, since other types of German company 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.
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.
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. The supervisory board also determines the management board's compensation.
Similar forms
Several countries have similar forms of company: Italy (Società per Azioni, S.p.A.), Denmark (Aktieselskab, A/S), Norway (Aksjeselskap, AS), Sweden (Aktiebolag, AB), Poland (Spółka Akcyjna, S.A.), Hungary (Részvénytársaság, Rt.), Slovakia (akciová spoločnosť, a.s.), the Czech Republic (Akciová společnost, a.s.), Serbia (akcionarsko društvo, a.d.), Russia (Открытое акционерное общество, OAO), and Finland (Osakeyhtiö, OY), among others. All have names that more or less literally translate to "Aktiengesellschaft" (for meaning see below), although their structures differ (for instance, an Italian S.p.A. is closer to a French S.A. than a German AG).
The form is roughly equivalent to the 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 S.A. in other civil-law jurisdictions, and to the Societas Europaea in the European Union.
See also
- Gesellschaft mit beschränkter Haftung (GmbH; limited liability company)
- Types of business entity