I sympathize but I'm not sure that is the sole reason the German state exists.
Although Sweden is a bit strange in the fact that banks have as much equal say as the government authority does in you starting a company, and if they don't want you as a customer, they can simply deny the right for your company to start!
Double taxation is not better.
https://www.e-resident.gov.ee/understanding-cross-border-tax...
There is light at the end of the tunnel as an EU Inc. is proposed.
However the bureaucrats in probable but all countries will try to water it down to pointless to keep or extend their responsibility territory and duties.
Edit: oh it's setup like this to cheat on taxes.
When it comes to tax issues etc. it turns out the company registration is meaningless. The sweet spot has to be somewhere in the middle. Starting a company shouldn't be something you expect to do in a day but it also shouldn't require you to sell a kidney or fill in pointless forms.
Taxes have nothing to do with the physical location of the company. You go after the owners, and I'm pretty sure you can't open a company in the UK anonymously.
Even banks are required to validate now, had my bank asking me to validate details even when i have my business for 6 years, same company, same address, and same bank account.
You shouldn't need a consultant to open a company. Should be a form and that's it. Maybe an accountant to certify your books, but that's it.
To me things taking longer and being more complicated sounds entirely reasonable and natural in such setup...
The cherry on top is the exit tax:
> And no, I could not just leave instead. My first company, Freshflow, is valuable enough that walking out of Germany would trigger a massive six-figure exit tax, on gains I have not even realised, purely for the privilege of leaving.
This is ostensibly there to prevent large-scale tax fraud but has ridiculously low thresholds that make life difficult for anybody who is shareholder of even a small company.
This is something you can solve with enough time, but if I get a job offer where I'm supposed to start in 2 months? Very inconvenient. (There are some ways to spread this out have this tax burden spread out over time, but it still represents significant friction)
Edit: Maybe I should give an example: Lets say you build up a company, your shares are worth ~100k, while you payed yourself a living salary of ~2k so you could pay rent and buy groceries but not much more, especially no savings. Now you get on offer to work in the US for 180k/a, you sigh "finally" and just want to move, but the German wants 30k Taxes on your unrealized ~100k capital gain before your leave - Is this the kind of situation you are referring to?
At this time, the whole system seems to revolve around geographic location. As long as you stay put you're sort of fine, but if you move around within the EU, the law doesn't stay stable around you. This is impractical.
EU Inc seems to be a new initiative to fix a lot of the patchwork problems, but doesn't seem to be live yet. ( https://commission.europa.eu/topics/business-and-industry/do... )
I'm told that interstate commerce in the US isn't always necessarily easier, mind. Maybe the EU can take some lessons learned.
You bill from the Netherlands and I think this is the only thing required. Uber in Europe charges your cards from Uber BV for example. And I think Uber is pretty international.
If someone has experience doing it right, I'd absolutely be willing to pay for their time to exchange advice.
The worst was sitting at the notary, and getting read out loud by her what we were about to sign (also paying for that).
If you think about starting a company, spend some time to think through what it would mean for you to be a Delaware C Corp or an Estoinian one. It will increase your chances of success as you can focus on what matters.
It's not enough to have had properly filed tax returns every year, have a large enough profit-collection-line item in your books (25k EUR+) and then fill out a form.
No, if you want to use the profit your UG was required to accrue to raise your capital stock to 25k and rename it to a GmbH you need to get your annual accounts audited.
Or alternatively, you can pay in the difference between your current capital stock (e.g. 2k) and the 25k minimum for the UG and then rename the company and "just" have to pay for the notary, publishing to public records, court, ...
We converted Freshflow into a GmbH and needless to say it was expensive.
Typically, you can spend your "Stammkapital" for business purposes (e.g. in a GmbH). It doesn't need to stay in your bank account.
It's a common misunderstanding that this money needs to be reserved somewhere for liability purposes. That's not correct. You can spend it, both in a GmbH as well as in a UG. Look it up youself (e.g. https://www.anwalt.de/rechtstipps/stammkapital-muss-ich-das-...)
I am sorry he has to go through this just to start a business.
1.) Yes, it took 3 months to switch the company hq + IRS + Notar etc.
2.) But it really does depend a lot on the city, state etc.
3.) UG is 500 EUR - changing to GmbH is then also quite cheap
Imagine 3 young Italians that would like to work together in a startup. Let's consider only the first year, imagine a B2B SaaS, they are incorporating but they'll work on the product and approach possible customers. Zero revenue.
Well, if you followed the law, you probably would spend something between 23'000€ and 25'000€ in total. WITH NO REVENUE. This is because even if you work for free for your company, you still have to pay taxes for INPS, our pension system.
And if someone invests in your company, you can't live out of nothing and would like to pay a founder even the minimum salary, YOU HAVE TO PAY INPS AGAIN.
This is crazy, our country is a joke.
EDIT: Adding a bit more of scary context and nice sprites.
None of the common financial advisor you find in Italy have ever heard of funding ways or contract terms that are really well known globally.
Do you want to include drag along and tag along clauses in your company statute? You have to talk with really expert lawyers and notaries in Milan that will bill you thousands of € for something that in Delaware is a pretty much standard single line of text.
Cordiali saluti!
> And the cheap door has a price of its own: to some clients, “UG” reads as “not serious,” and they would rather deal with a GmbH
The post itself explains exactly why the first complaint is a fallacy and the second one is true:
> The simplest setup is a sole proprietorship [...] also makes me personally liable for everything. A client sues? They are not suing a company. They are suing me. My savings, my apartment, my name.
> So I wanted real limited liability, which means a company.
The liabilities of a limited-liability company aren't your risk.
The people who stand to lose out if your company folds are not you but your customers, creditors and anyone else with a claim to more than the company can repay.
The more capital it has, the less likely it is to collapse while having more liabilities than assets.
Also, you can found a GmbH and only pay in 50% of the €25k. My understanding is that you're still personally liable for the rest, but it lowers the hurdle to founding a GmbH at least somewhat.
But it was his call. As the author has already pointed out, he could have started a sole proprietorship, but he did not want to take on that risk. The 25'000 is because it's not his risk if he starts a GmbH, it's the GmbH's risk.
Also, the 25'000 are not a toll, it's the company's Stammkapital. The GmbH owns that money. And afaik, in Germany you only have to pay in half of the 25k.
However, it has to be actual wages, i.e., the founder has to do work in return for a salary, and the salary has to be reasonable. You can't just have the GmbH pay you back the money you put into the company. There are also other limitations (https://dejure.org/gesetze/GmbHG/30.html), but that's the main one.
Another part is taxation the tax office takes your money really fast but returns can be another slog where the tax office denies legal claims again and again untill you get a lawyer etc. and it generates costs again needlessly because it's really dependent on who works on your tax records and there mood apparently.
Trains, Berlin Brandenburg Airport, this.
It's rules and adherence to rules, more than efficiency, that I've found in my experience.
It's a "cover your ass" mentality that resists any changes.
They laid 600+km of cables wrong ultimately delaying the project by 6 years.
But notably in OP's case, most of the time is actually spent with the lawyer and tax advisor, no the bureaucracy itself. The more complicated company structure (Ug & Co KG is basically one company (an UG) owning another (a KG), giving a very similar structure to an UG at a slight tax advantage), doesn't help, but it's really not where the majority of the time here is lost (it probably does account for about half of the money though)
If an american comes and says they founded a public company (with stocks and all), and complained about the fuzz involved, you would also tell them that it's their own fault, right?
That said, maybe the US/Delaware LLC has this component as well, I'm not a lawyer :D
Everything is unbelievably complicated and over-engineered, and every layer is immune to change. Every rule was rational when it was added, and now everyone has a financial stake in continued complexity. The German notary is the highest-paid notary in the world, and the highest-earning professional in the country.
That said, I think a lot of the frustration comes from a mismatch of expectations. Germany wasn't designed for randos to start companies and thrust change on society. All the bureaucracy is a filter, and what it filters out is change itself.
You were never supposed to incorporate a company. You were supposed to get a job at Volkswagen.
The problem with OP is that he chose an overly complicated structure. Probably got milked by lawyers and advisors.
The issue is, the people holding the stamps (and believe me, they ARE stamps, with ink and all) are in charge, and are VERY reluctant to give up that comfy job. Zero accountability, too, since once you are a government employee, it's incredibly hard to get fired. So they stall the process, forever, without any reprecussions.
I am all for having and caring about process and dealing with everyone equally. That's why I live in Germany and not in Eastern Europe where often some money under the table is the only oil in the machine. No such oil in the German machine, thankfully. But it's infuriatingly slow, because bureaucrats are in control and will never willing give up that control.
This costs about 28k€, 25k€ are deposited in the company.
That is called Vorratsgmbh and takes very little time.
If you want a GmbH quickly there are specialized lawyers that maintain a pool of freshly founded GmbH's for you to buy. Everything is set up for you to start. If you don't like certain things like the company name, you can always change it later.
That being said, I know plenty of people who founded their GmbH themselves and it went smoothly. It's not that it can't be done, it's more that OP chose an overly complicated and untypical scheme and was surprised about the complications.
And of course, lawyers being lawyers, answered you need to wear both a belt and suspenders. This is the answer you'd expect from a lawyer. It is your responsibility as a founder to do the risk assessment. The fact that almost no one wears both a belt and suspenders might have been a hint.
It doesn't sound easy nor cheap to buy a company and change the company name.
UG & Co. KG has a couple of advantages and while it did add some money and time to the table, it doesn't change the story.
Notaries in the US are the price of a dinner. Many people have waited up to 6 months to receive their VAT ID from Berlin.
Maybe OP was just not advised well which is surprising given the amount of information available online (startup guides for Germany)
Also, a founder spending months coordinating lawyers banks and tax advisors is not talking to customers or building the product. The opportunity cost here is huge.
Anyway, you are pretty close. One more push, don’t give up. :)
EDIT: Just re-read your message. I thought it said EU. But the point stands, Germany is not Europe either.
In France you can do it as soon as you started the process.
Germany doesn't have such excuses, yet there it is.
The 25,000 is there to make sure you can cover some liability. If you really wanted "your company and your risk", you could have used the "simplest setup", where you are liable with your own money, but if you think about it that way, it doesn't sound so appealing, does it? So of course the UG which does not (yet) have 25,000 in the bank sounds less serious than the GmbH that has 25,000 in the bank. A company that starts with nothing wouldn't be a GmbH (limited liability company), it would be a GoH (company without liability), and there's a good reason why those don't exist...
You can also declare that you’ve paid the capital in, without any proof required for small amounts (up to 50k € IIRC). If you lie about it, I suppose you’ll be personally liable for everything, so definitely not worth risking it. Just put in like 500 €, set it aside on the business account, and don’t touch it.
(IANAL)
Without this "exit tax", every founder of a successful business would have a huge incentive to leave and to realize the gains elsewhere. It's not a tax for the privilige of leaving, but for the privilege of building a company. I can see only three alternatives to this:
- Abolish the capital gains tax entirely.
- Make defering it impossible. Force people to pay immidiately. No "exit tax", but people have to pay for unrealized gains.
- Tax people when they realize their gains in a foreign country.
If you want to move out of Europe, you get the exit tax as before.
Now you understand why the USA deploys 3-4x the amount of VC capital compared to the EU. And prior to the current administration, entrepreneurs mostly wanted to get to the US.
Luckily with how the current German economy is doing this is a problem that will solve itself. It's like the last half a dozen German governments look at the Morgenthau Plan plan and thought it was an amazing idea they must implement.
Regarding the economy though, Germany is still the third richest country on earth. I think this is talking point about their huge regression is mostly FUD.
Consulting or dev work doesn't need deep capital. we're insured for X if Y happens. A UG is fine. The "not serious" label only sticks because founders keep caving to it.
Let the client adapt to your setup, not the reverse. If their compliance department doesn't get it, that's a gap to close, evry time you stand your ground, you normalize the UG for the next founder.
It's insane that giving stock options (core to attract talent) or raising capital for equity is so difficult across Europe.
And don't get me started on how difficult it is to fire people that just don't work and only pretend to, spreading doing jackshit across the company.
Europe has the talent and even the capital, but the incentives are just not here, neither to attract talent nor serious investments.
The continent is old and politicians keep trying to band aid the system, consistently claim regional-national policies over common European rules, they will claim Europe makes it difficult to do business, just to reinvent their own commercial, import/export rules, tax rules non stop.
I don't want to say it's a disaster, but we really need some party that looks at commercial, trade and corporate law across Europe.
In addition, he counted 2,000 € of shared capital as an expense, which it isn't. He did not opt for a "cheap" UG which requires no up-front capital, because of its bad reputation.
He also includes a bill for accounting software of 426.97 € into his calculation. This has nothing to do with founding costs, but are operational expenses.
As the author states that he set up the company through a law firm, I wonder which of the figures includes the cost of this service. To be fair, this should be listed separately, as such costs can vary widely or be omitted entirely if the company is incorporated solely through a notary.
Also the information about the minimum deposit when founding a GmbH is incomplete. He states: "A GmbH wants 25,000 euros sitting in a bank account before it is allowed to exist." Fact is that you need only deposit half of it upfront into the GmbH; you only have to deposit the rest of the money if the company is in trouble. The company can also immediately lend the deposit back to the founder at market rates. If the company’s articles of association permit it to hold shares in other companies, the company may also use the contributions to purchase shares or similar financial investments. His law firm should actually have advised him on this matter.
The main differences between a standard GmbH and a GmbH & Co KG lie in their somewhat different tax arrangements.
So all in all, the author paid 7,227.74 € to found a rather complex company structure. Judging by his reasoning, presumably for the wrong reasons.
When I found a GmbH in 2019 without the help of a law firm, it cost me about 2,000 euros (if I recall it correctly).
> Founder chooses the most complex legal structure that's readily-available... and is surprised that this complexity comes with laywer and notary fees.
> Founder decides to incorporate a company with the name of a popular brand of kitchen rolls... and is surprised that it's too generic.
> After "weeks of correspondence" (and, I suppose, extensive research), founder decides to incorporate a company that's named the same as a Swedish online marketing company instead. Very distinctive. No risk of confusion, ever.
It took 3 months from registration to sending her first invoice. The longest wait was on the bank account: a very few places are willing to open company account if you don't have an EU residency. Without the bank account, she couldn't deposit founding capital (základní kapitál) which is required to complete the registration. It's even funnier cause the minimum amount to deposit is 1 CZK (5 cents).
Total cost to start business was under $8,000. The most expensive were legal services: writing down all contracts and customer agreements was around ~$5,000.
I feel like this is such an untapped market for getting digitilized. I was thinking to actually sit and vibe code it at some point but can't imagine doing this alone.
I seriously don't know what you people are doing. I've set up companies in Germany, the US, Brazil and Mexico.
The US was BY FAR, the most enjoyable experience. Won't say anything else. It was a breeze! But Germany wasn't as bad as people make it sometimes. Just don't go with a super complicated, overengineered setup and you are up and running almost instantly. Better won't mention Brazil, though.
If you have the resources, get some QUALIFIED lawyer/notary on board and it'll all be super chill and quick. And if you're just getting started, just do a sole proprietorship as you get started (and you can start working pretty much on the same day), and have the GmbH setup process run on the side.
Running the business is the hard part!
I’m not here to defend a big country that clearly has to do better, of course.
Good.
Who are these people that care
“Oh you don’t have a GmBH, oh your share capital is so low ohhh ho ho ho ho”
- There is no double taxation if you just pay yourself a salary (since it’s a normal business expense). If you want to take money out of the company flexibly, a GmbH is the wrong structure.
- I’ve never heard of anybody doing an UG/GmbH + KG to get started. This is highly unusual. Most people either do just a simple UG or maybe they set up a holding structure with two separate GmbH / UG entities.
- Related to the above: if you go with a simple, standard structure you will incur minimal legal fees. You don’t need a lawyer, you just directly task a notary and tell them you want a standard setup.
- If you don’t want the complexity of a limited liability company, the standard way to reduce liability risk is to get liability insurance. Many, many people do this instead of having a GmbH.
The valid criticism is the a) lack of digital processes and b) sequential processing of steps that could happen in parallel. For example, I sped up my own GmbH process by driving to the register court and paying in cash on-site. For whatever reason that’s much faster and saves about a week.
The processes are all non-digital, and have many steps like Notaries for example.
But the GmbH & Co KG setup the poster wants is not needed for limited liability.
You get that with a plain GmbH (or UG), which is much, much simpler to set up.
Might happen really easily though. E.g. you install some package which has been compromised, infecting your software product and suddenly all your customer's systems are cryptolocked and you are on the hock for millions of €€€.
Or your db crashes in new and creative ways and your backups don't work for some reason and now your customer lost an expensive contract because critical data that was in your db is gone.
Of course, you can try to foresee every eventuality, but you will indubitably overlook something and probably never make it to market.
(if there's anything Germans like as much as bureaucracy it's insurance)
Professional indemnity insurance
Business interruption insurance
Directors and Officers (D&O) insurance
Commercial legal expenses insurance
nowadays Cyber insurance
I think I might have forgotten one or two...
I did a GmbH with "Musterprotokolle" so virtually no lawyer fees and quick and easy to set up.
And a GmbH is limited liability. It's in the name. Gesellschaft mit beschränkter Haftung. GmbH.
The Geschäftsführer is liable for certain (avoidable) things in either case.
The difference is that that the Co KG can be taxed like a "Personengesellschaft". So you wanted to optimize taxes, which leads to a more complicated structure.
You are certainly allowed to choose such a more complicated setup if you think it's better for you. But then don't moan about it being complicated. It was your choice.
I don’t understand why you’re deriding someone for explaining why establishing a common business structure is slow and complicated.
The fact that a less advantageous business structure is available faster, but with significant tradeoffs, does not diminish the problems with this business structure.
It is not this complicated to set up a limited liability company in Germany. It is this complicated to set up his choice of a two company setup. Which is, I repeat, his choice and much rarer than a GmbH, at around a 5-10% ratio. Because it is more complicated, not just to set up, but also to run. You have two companies, so two sets of books, two sets of audited returns etc.
Which is why most companies are not GmbH & Co KG. They are plain GmbH. A GmbH & Co KG is a much more complex setup and known to be a much more complex setup. Which he knowingly chose.
And his claim that this is somehow necessary for limited liability, which would be a legitimate "significant tradeoff" is simply not true at all. That's what the GmbH is for.
Now maybe he was badly advised by his lawyer, but then complain about the bad advice. Not about the consequences of choices you made.
Starting out a company as a UG & Co KG is a tax optimization move, not a liability issue
Thanks for the clarification. However I’m still surprised that tax optimization is also considered a footnote in these conversations.
In the countries I’m familiar with (mostly the US, minor second-hand experience with friends in some other countries as they started their businesses) starting a limited liability business venture that has the tax structure of a business isn’t considered a heroic effort. Starting the business is basically the least of your concerns. Almost a formality.
He wanted something more special than that.
Which is possible, but complicated.
By Nov that year I decided to look into the tax implications and they were unpleasant so I wrote the IRS asking to be considered an S corp from the beginning of the year and they sent me a letter saying it was so. I ran payroll in Dec to catch up.
When doing taxes likewise I added a cover letter explaining the mistake about which entity was to receive the money and then assigned the income to the S corp on the return and worked everything through and corrected it in the right way.
The return took months to process and I had a mistake in the taxes that I was fined for a couple thousand which was reasonable but they accepted all these natural errors that I fixed up.
That sequence of encounters with the US government blew my mind. The much maligned IRS was eminently reasonable.
If you do business in Germany you are evading taxes just by the fact of doing business. Everything and anything you make belongs to the government. It is an unfortunate loophole in the law that temporarily permits you to steal some of your profit back from the government where it rightfully belongs.
Yeah, this is sarcasm, but not really. The practical reality is that it simply makes no sense to incorporate in Germany. For example, the OP missed six months of opportunity just to please the bureaucracy and it's not even the end of it.
That means you pay German taxes + double amount of compliance ( because you have to file everything in Germany+ Estonia ).
The classic European trick: it's one strong union when you want to use counting stats or independence from America , but you can't lump in the duchy 3km away as the same when you want to pick and choose the metrics that make you look good.
Getting a little bit more annoying year-on-year for maintenance with stuff like identity checks and software requirements for eg tax information, but still trivial to initially create
The whole premise is nonsense to begin with.
The challenge is if someone makes a software company, and a team of 20 workers on computers create a €10B business, does the state have a fair claim to €5B of it when the company at most with the most generous possible estimate (and then double it for good measure) used €50M of state services?
Wait, how does that work? Are you saying that if the bank doesn't like me, instead of just denying me a loan, they can convince other banks not to loan to me as well?
You just have to specify it when registering the company, and have an accountant certify the value.
But obviously, it's more annoying and you have to keep track of depreciation.
Same story goes for opening a personal account.
how much would it cost to pay someone "1 hour away by train" to go into that office for you?
In practice banks will deny anybody to open an account, for no reason at all, because they are above the law in Sweden. The country has for a long time been owned by a few powerful banker families.
Edit: Down voters might first want to look at Wikipedia for the Wallenberg family. This is as much part of Swedish culture as IKEA or meatballs.
I challenge anybody to find a country in modern history which is more owned and controlled by bankers than Sweden.
Some years ago a case became quite famous in Spain. Someone wanted to turn a winery into a eco-tourism boutique hotel with a winery tour and experience. Should be simple in theory, in practice they were waiting for authorization to open for more than 4 years.
I’ve been involved with startups and small businesses for more than a decade, and I haven’t still heard of any of them doing things 100% by the book, because it’s just impossible.
People just start and hope the taxman doesn’t come.
Under some circumstances you can be held liable through a GmbH, but not generally speaking.
> rejecting the option with VAT number
Means you are planning to run a small business (making less than minimum wage on a yearly basis), also you are opting out of Vorsteuerabzug. Anyone that wants to live off their business needs VAT. And that is given by Bundeszentralamt für Steuern and the wait times are often excruciating.
Why would you otherwise voluntarily subject yourself to the extreme complexity of countries like Belgium or Germany if you could just set up a simple Bulgarian or Estonian llc?
edit: it's a regulation, not a directive, so it will be directly available in all countries, without each country creating its own laws to implement it. But it'll take until 2028 or so until it's actually be available.
The world got faster, but german industries and politics never got the memo.
Comes down to a misrepresentation of history. Germans were never known to be efficient, they were known to be precise with everything, including bureaucracy. This happens to be handy with machinery, but not much else.
Really I think that they just landed on some really successful marketing.
Germans are thorough, not efficient.
Then you have to be compliant in 2 jurisdictions (file forms/balance sheets in both countries etc..) and worst case you could become subject to double taxation (if there is no agreement).
The optimal solution is just to leave Germany .
Wyoming LLC gives passthrough taxation, and because you're in Germany, you'll be subject to just German personal taxes alone.
Just go to one of them Baltic states. They actually have a functioning electronic ids and other necessary infrastructure.
There’s no reason to live in Germany if you’re working with international clients.
This is probably the solution, an EU-wide company that has local offshoots and can handle the bureaucracy for a fee.
> and as you see everything costs a lot
this sounds like a system primed for corruption
if you can pay half the needed amount to do everything 5 times as fast, would you not do it?
That's your problem right there. If you live in Berlin, take the 2 hours and go to Hamburg or Leipzig before doing anything that needs a working bureaucracy.
[ed.: a tiny office in Leipzig ist pretty cheap too, but you'd need to ensure mail doesn't pile up there unchecked.]
Unfortunately I'm not joking about this entire thing. Berlin's underfunded, overstressed bureaucracy is to be avoided like the plague.
Again this is very straightforward and routine in the UK: https://paramountformations.com/product-category/off-the-she... ; a similar experience to buying a domain and spinning up a website on it. In organizations like investment banks they will have shells ready to go in the way you would have kubernetes pods.
So, the story is really that it takes a couple of weeks for a freshly founded company to be ready to invoice customers outside of Germany, which I agree, is a sad state.
That. It's possible to go even simpler if no limited liability is needed.
Just Gewerbeanmeldung costs maybe 30€ and takes less than a month normally. Large cities even have online forms for this.
Also the reporting duties are much simplified. ChatGPT and some accounting software are very helpful. Although a tax consultant and probably a liability insurance are recommended to avoid bad surprises.
You could put in 2500 € in capital – then your personal exposure will be zero. In practice, I don’t think it’s a meaningful difference, you will just have to keep the whole 2500 € on the company balance by the end of each FY. (Unless you wanna deal with non-monetary contributions!)
If you put in 500 €, you’re liable for 2000 € personally, but you don’t have to keep them for your annual report. (It also means your company looks a bit riskier, since you might not have the 2000 € personally, so you might have trouble getting credit or whatever, but otherwise I don’t think it’s a big deal.)
Edit: I'm not a lawyer either!
You are now limited in liability for what the company does, to no more than the capital you put into it.
You then have to supply yearly accounts, may have to register for corporation tax, VAT, register as an employer for paying national insurance, you'll probably need business insurance, etc.
Edit: And these days you don't even need two people - used to be that you needed two directors or director and company secretary.
- https://assets.publishing.service.gov.uk/media/5a7da236e5274...
- https://www.gov.uk/guidance/model-articles-of-association-fo...
Depending on who you ask, one system is wildly better than the other, but at the end of they day they are just different systems with different tradeoffs.
I would characterize it rather that the US is pro-business and pro-consumer, but somewhat anti-average worker.
I disagree: the EU system broadly is there to support _the incumbants_
"Regulatory capture" is the less kind way to put it.
It had got us "more credibility" with our clients, and 12,500EUR less in each other's bank accounts.
Thanks for your insults.
What's the good reason? In the UK I can started a Ltd with £1 of share capital, about £100 of fees, and filling out a form online. I will be shielded from personal liability if it goes tits up unless I've broken the law, knowingly traded insolvent, or otherwise been an idiot.
The wider thread appears to be Germans commenting that it's unthinkable that such a thing could exist, and thus it's all the author's fault.
Those do exist in other countries. An LLC in the USA does not generally need to have a certain amount of assets. Such a company is more or less without liability until it has some assets; the worst case for its owners when it comes to a routine business debt is shutting down the company. Exceptions are possible in case of serious misconduct of course.
Of course a company like that will find it difficult to borrow money, but it's not rare for its last bills to go unpaid when it goes out of business.
Whether those should exist or not doesn't have a clear answer. Culturally, Germans tend to be pretty uncomfortable with "sometimes shit happens and debts go unpaid", while Americans tend to find a moderate rate of that sort of thing tolerable, especially if it makes starting a new business viable for a greater fraction of the population.
I would suggest that this idea of a GmbH does not actually work the way you think it does. Maybe it once did, but not any more. For instance:
Wirecard Technologies GmbH
Wirecard Sales International Holding GmbH
Wirecard Acquiring & Issuing GmbH
Wirecard Acceptance Technologies GmbH
Spoiler: the bad guys don't care about the rules!
stop50•1h ago
Bombthecat•1h ago
earcar•1h ago
WaitWaitWha•1h ago
So, if I started a sole proprietorship, it is not possible to convert it to a full blown, privately held corporation in Germany?
Aurornis•1h ago
That’s the bare minimum consideration for a viable company structure.
valzam•1h ago
mpweiher•30m ago
earcar•1h ago
I explain in the post how the other options are worse.
sevenzero•1h ago
Also, if you believe in your product there usually isn't a reason to go for a GmbH this early. You can send invoices a lot earlier with just a eK or GbR. Its not an issue to adhere with your private money if your product isn't causing damages.
earcar•1h ago
sevenzero•1h ago
Leptonmaniac•1h ago
scarmig•1h ago
Aurornis•1h ago
That’s incredibly important. More than a footnote. I would consider any other form to be non-viable if it doesn’t have such protections.
For comparison, starting an LLC in the United States is a trivial operation. I can’t even remember how long it took me to set mine up because it was a trivial event. Maybe a couple hours, mostly research? I also have to fill out an online form and pay a few dollars every year to renew the LLC.
fifafu•1h ago
(However I absolutely agree that all of this is much too complicated and slow here in Germany)
ExpertAdvisor01•1h ago
wongarsu•56m ago
Yes, it's more involved than an online form. But in the grand scheme of things, a notary is neither a huge expense (the tax advisor will likely cost you more) nor a big time sink
nradov•15m ago