Actually, legally its a bit more difficult. You cannot ban an ideology in a democracy.
The NSDAP is banned, and any attempted successor organisation.
But national socialism as a way of thinking can not be banned. Of course holocaust denial is now a punishable offense (which I think is rubbish). Not that I deny the Holocaust, only its like banning flat earth society.
As I allready posted, a party can be banned when it is actively pursuing the overthrow of the present constitutional order.
There are a bunch of fringe parties with a dozen members on the average on both ends of the political spectrum that are monarchist, national-socialist but not Hitlerite (Strasser faction), or on the other end stalinist, maoist or even a small bunch of followers of north korean Juche ideology
Not to mention radical ecologists, Yogis, radical feminists and a strange "Anti-Green" party founded by Lydon LaRouche (and the CIA) that employs Scientology-like methods.
These groups are all legally registered parties because they either try to fulfill their goals within the system or because they're too small to matter.
With associations ("Vereine") the law is not that strict, they can be banned if violating principles like the peace of the land, democracy and the likes.
But if you're a party, you're on the safe side and can get away with stuff a normal association wouldn't. Associations also can be banned by administrative act (which can be attacked in court) while a Party ban is only possible by order of the federal constitutional court.
Sofar, only two parties have been banned: The "classic" communist party KPD in 1956 and the socialist Reich party in 1957.
The SRP was simply too obviously aping the NSDAP while the KPD ban was just Cold War. Adenauer leaned heavily on the judges and the legality of that verdict is very questionable. A new KPD was just never founded because the socialists were too fractured.
The right-wing FAP was banned in the 1980s but the court ruled that it was not a party, so it was simply banned by administrative act.
I think I allready posted what went wrong with the NPD, but here it is again:
The NPD party head consisted mostly of moles. Practically everyone in any leading position in the NPD was on the payroll of some intelligence service. Since the intelligence community in german is very fractured due to federalism, some agencies didn't know about the activities of the other and some NPD members "spied" for serveral agencies without those knowing of the others.
So the defense simply made the case that it cannot be ruled out that the revolutionary tendencies were deliberately planted by the government through these moles in order to get the party banned.
Since "in dubio pro reo" applies here as well, the court had to follow the defense.