“Aktiengesellschaft” (AG) is a German term that translates to “stock corporation” in English. An Aktiengesellschaft is a type of legal structure for a company in Germany and several other German-speaking countries. The AG is a form of a public limited company, and it is characterized by the issuance of shares that can be publicly traded on the stock exchange.

Key features of an Aktiengesellschaft (AG) include:

1. **Share Capital:**
– An AG is required to have a minimum share capital, which is divided into shares. The ownership of the company is represented by these shares. Shareholders are the owners of the AG, and their liability is limited to the amount invested in the shares.

2. **Shareholders:**
– The ownership of an AG is typically dispersed among multiple shareholders. These shareholders can be individuals, institutions, or other entities. Shareholders exercise their rights through voting at annual general meetings.

3. **Board Structure:**
– The management of an AG is carried out by a two-tier board structure:
– **Supervisory Board (Aufsichtsrat):** The supervisory board oversees and appoints the executive board. It also monitors the overall management of the company.
– **Executive Board (Vorstand):** The executive board is responsible for the day-to-day management of the company’s operations.

4. **Public Trading:**
– One of the defining features of an AG is that its shares can be traded on the stock exchange. This allows the company to raise capital from the public by selling shares to investors.

5. **Legal Requirements:**
– The formation and operation of an AG are governed by German company law, particularly the Aktiengesetz (AktG), which is the German Stock Corporation Act.

6. **Corporate Governance:**
– German corporate governance principles emphasize a balanced approach between the supervisory board and the executive board. The dual-board structure is designed to provide effective oversight and management.

7. **Financial Reporting:**
– AGs are required to follow strict financial reporting standards. They must publish annual reports and financial statements that provide transparency to shareholders and the public.

8. **Annual General Meeting (AGM):**
– Shareholders participate in decision-making processes through the annual general meeting. During the AGM, they discuss and vote on matters such as the approval of financial statements, the election of members to the supervisory board, and the distribution of dividends.

9. **Liability:**
– Shareholders in an AG have limited liability, meaning their financial responsibility is limited to the amount invested in the company’s shares. Personal assets are generally not at risk beyond this investment.

10. **Dividends:**
– AGs may distribute profits to shareholders in the form of dividends. The decision to distribute dividends is typically made during the annual general meeting.

Aktiengesellschafts are commonly used by large companies in Germany and are suited for businesses seeking to raise capital from the public markets. The legal and governance structures of AGs are designed to provide transparency, accountability, and protection for shareholders.