I heard, that transition from UG to GmbH might be associated with additional costs. Also some older folks don’t like UG in general, because it is “immature” company status for them. Personally I don’t like (haftungsbeschränkt) at the end. It’s longer than actual company’s name and just does not sound good.

If you found with 1€, the moment you place the signature your company is insolvent as it can't pay the resulting invoice. Even if you found with 1k it is often quite near to overwelm the newly created company.

Beside that, UG has very bad reputation and if you need something your company rating will lead to problems like prepayment when ordering goods. New GmbH is not the best either but increased quite fast.

In addition, transition from UG to GmbH is a bit of a pain, as you need a let your books be checked (costly) or by just paying the amount to reach the GmbH money.

There are some fixed costs with transitioning to a GmbH (notary, Handelsregister, etc.), along with all the time you have to spend to change the name all over the place, which quickly amounts to a few thousand bucks.

Given that the 1€ founding is an illusion anyway, as you will need to have some money in the company to pay your accountant, Berufsgenossenschaft, (the salary you are living off if you are working full-time), etc., the benefits of requiring somewhat less (maybe 5k instead of 12.5k) are not that great.