Key Points
- A GmbH classified as small under HGB §267.1 is exempt from statutory audit. Medium-sized and large GmbHs must be audited.
- The April 2024 amendment raised the small-company ceiling by roughly 25% (to €7.5M balance sheet total and €15M revenue), pushing some previously medium GmbHs below the audit trigger.
- Classification requires exceeding two of three thresholds on two consecutive balance sheet dates (BS dates), not just one year.
- Misclassifying a GmbH as small when it is medium-sized exposes the directors (Geschäftsführer) to personal liability for the omitted audit under §316.1.
What is GmbH Audit Thresholds?
Every year, mid-tier German firms pick up new GmbH clients and run straight into the same question: does this entity actually need a statutory audit, or is the engagement letter premature? Getting the answer wrong in either direction creates real problems. If you classify a medium-sized GmbH as small, the directors carry personal liability for the missing audit under §316.1. If you classify a small GmbH as medium-sized, you bill for an audit nobody required.
HGB §267 sorts every Kapitalgesellschaft (including every GmbH) into four size classes: micro, small, medium, and large. The audit obligation under §316.1 applies only to medium-sized and large entities. Small and micro GmbHs are exempt.
Classification uses a two-of-three test applied across two consecutive balance sheet (BS) dates. A GmbH exceeds a size class when it crosses two of three thresholds (BS total, revenue for the twelve months preceding the BS date, average number of employees) in both the current and the prior year. HGB §267.4 contains the timing rule: a corporation changes size class only when the relevant thresholds are exceeded or no longer exceeded on two successive reporting dates. One year above or below the line changes nothing.
The April 2024 amendment (Zweites Gesetz zur Änderung des DWD-Gesetzes) raised the monetary thresholds by approximately 25% for financial years beginning after 31 December 2023, with optional early application for years beginning after 31 December 2022. Employee thresholds stayed unchanged. The same rules apply to a GmbH & Co. KG through HGB §264a, which extends HGB corporation rules to partnerships without a natural person as general partner.
Worked example: Kellner Einzelhandel GmbH
Client: Austrian-origin retail GmbH registered in Germany, FY2025, revenue €12M, HGB reporter. Kellner operates 14 retail stores across Bavaria and employs 82 people. It reports a BS total of €6.8M.
Step 1: gather the two-year data set
The engagement partner collects the §267 threshold data for FY2025 and FY2024. In FY2024, Kellner reported revenue of €11.5M and a BS total of €6.2M. It had 78 employees.
Step 2: apply the post-April 2024 thresholds
The current small-company ceilings are BS total ≤€7.5M, revenue ≤€15M, average employees ≤50, and these apply to FY starting after 31 December 2023. For FY2025, Kellner's BS total of €6.8M is below €7.5M (criterion not exceeded), revenue of €12M is below €15M (criterion not exceeded), but average employees of 82 exceed 50 (one criterion exceeded). Only one of three thresholds is exceeded. For FY2024, the same pattern holds: BS total €6.2M (below), revenue €11.5M (below), employees 78 (above). One criterion exceeded in each year.
Step 3: determine classification and audit obligation
Because Kellner exceeds only one of three thresholds in both years, it remains classified as small under §267.1. HGB §316.1 does not require a statutory audit. The Wirtschaftsprüfer (WP) confirms that no audit obligation exists and documents the conclusion. The file is defensible because it documents both years and applies the current thresholds while flagging the change from the prior classification regime.
Why it matters in practice
The two-consecutive-years rule in §267.4 trips up practitioners in both directions. A GmbH that crosses the medium-sized thresholds for the first time in FY2025 does not become medium-sized (and audit-obligated) until FY2026 if it also exceeds the thresholds in that year. Conversely, a GmbH that drops below the thresholds after the April 2024 increase must remain below for two consecutive years before it can shed the audit obligation. Teams that reclassify after a single year of threshold change produce a file that WPK peer reviewers will flag.
At firms we have spoken to, the §267 classification step is sometimes treated as a tick box exercise: pull last year's numbers, confirm the class, move on. That is exactly how the errors happen. A new-client acceptance that skips the two-year lookback, or that applies pre-April 2024 thresholds to a post-2023 FY, will produce a wrong classification that nobody catches until the WPK review letter arrives.
Practitioners at smaller firms also sometimes overlook HGB §264a, which extends the §267 classification and §316 audit obligation to GmbH & Co. KG structures (partnerships where no natural person serves as general partner). A GmbH & Co. KG that exceeds the medium-sized thresholds requires a statutory audit on the same terms as a standalone GmbH. Missing this extension is the single most common classification error in German practice for mid-tier firms. It is frustrating because the fix is simple: add the §264a check to your acceptance checklist and it never happens again.
GmbH audit thresholds vs. disclosure thresholds
| Dimension | Audit threshold (§316) | Disclosure threshold (§325) |
|---|---|---|
| What it controls | Whether the GmbH must appoint a WP for a statutory audit | What the GmbH must publish in the Bundesanzeiger (Federal Gazette) |
| Size class trigger | Medium-sized or large (exceeds small ceilings under §267.1) | All size classes must file, but scope varies by class |
| Small GmbH consequence | No audit required | Abbreviated balance sheet only; P&L may be omitted under §326 |
| Medium GmbH consequence | Full statutory audit of Jahresabschluss and Lagebericht | Full balance sheet and P&L, with permitted aggregations under §327 |
| Penalty for non-compliance | Directors face personal liability; financial statements may be challenged | Ordnungsgeld (penalty fine) starting at €2,500 under §335 |
The audit threshold determines whether a GmbH needs a WP. The disclosure threshold determines what the public sees. A medium-sized GmbH faces both obligations simultaneously. A small GmbH faces only the disclosure obligation (in abbreviated form) and can skip the audit entirely.
Related terms
Related reading
Frequently asked questions
What are the current GmbH audit thresholds after the 2024 change?
Since April 2024, a GmbH is classified as small (and exempt from statutory audit) if it does not exceed two of three ceilings: €7.5M balance sheet total, €15M revenue, 50 employees. These thresholds apply for financial years beginning after 31 December 2023. HGB §267.1 contains the small-company definition; §316.1 limits the audit obligation to medium-sized and large corporations.
Does a GmbH & Co. KG also need an audit if it exceeds the thresholds?
Yes. HGB §264a extends the full set of corporation rules (including §267 classification and §316 audit obligation) to partnerships where no natural person serves as unlimited partner. A GmbH & Co. KG that qualifies as medium-sized or large under the same two-of-three test must appoint a Wirtschaftsprüfer and undergo a statutory audit identical in scope to a standalone GmbH.
Can a GmbH voluntarily opt for a statutory audit even if it is small?
A small GmbH can engage a Wirtschaftsprüfer for a voluntary audit, but this does not produce a Bestätigungsvermerk with statutory force under §316. The engagement letter must distinguish between a voluntary audit under IDW standards and a statutory audit (gesetzliche Abschlussprüfung). Banks and investors sometimes require an audit regardless of size, making the voluntary engagement common in practice even when §316 does not mandate one.