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How I would start my next startup in Germany without a GmbH (2020)

richventures.com

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Re: How I would start my next startup in Germany without a GmbH (2020)

#101

Post by marcinzm »

hef19898 wrote: post #94
tobilg wrote: post #82

Earlier quoted context omitted.

That’s not correct. Creating a UG will set you back hundreds of EUR for notary fees, commerce registry entries etc. And you have to prepare your annual accounts, which, if you let a professional handle it, will easily cost you hundreds more

I love how being compliant, taxes, accounting, other regulations seems to be such a hard thing for people looking for millions of VC money while litterally thousands of companies do so every day. I do see a pattern there so, after all ignoring regulations is still a viable business model for SV companies.

> people looking for millions of VC money

Startups don't begin with million of VC money which is what we're discussing here.

Re: How I would start my next startup in Germany without a GmbH (2020)

#102

Post by Aulig »

hef19898 wrote: post #12
Aulig wrote: post #7

Great post, fully agree. Also, if you plan on leaving Germany you can save a lot on taxes if you do it before 100k profits/year and as a Personengesellschaft (without limited liability, so no UG/GmbH). Basically because the Wegzugsbesteuerung (moving away tax) only affects limited liability entities and Personengesellschaften are only affected by the Steuerentstrickung, which can be minimized by saying your profits a…

Or keep the GmbH / UG and create a sperarate entity in an other country that has full or partial ownership. Either way, paying some tax law expert, even if expensive is the best advice. And not having a limited liability entity is actually pretty stupid, for a full catalogue of reasons.

Because of personal liability? Looking less legitimate to other businesses? Or what other reasons are you thinking of?

Re: How I would start my next startup in Germany without a GmbH (2020)

#103

Post by ChuckNorris89 »

woodson wrote: post #5
cloogshicer wrote: post #3

Thanks for the post. Reading this made me quite angry - politicians here in Germany always talk out of their asses about improving the situation for startups, but when it comes to removing these ridiculous administrative hurdles, absolutely nothing happens. In Austria, where I live, it's even worse. It's not even possible to start a limited liability company without at least 35k starting capital in the bank.

Agreed, they’ve been talking about introducing an “Austrian limited” with lower capital requirements for I don’t know how long…

ÖVP has better things to do than make life easier for 'the little guy' when they're so busy catering to their chums in big business.

Re: How I would start my next startup in Germany without a GmbH (2020)

#104

Post by andi999 »

hef19898 wrote: post #58
SkyAndSand wrote: post #56

Earlier quoted context omitted.

While you can quickly set up the legal entity, getting a tax number can take months ( https://www.selbststaendig.de/wissen/steuernummer-beantragen ). The last time we set up a company in Germany it took more than 6 weeks to get a tax number.

Oh, forgot about that... VAT numbers as well. Go through a tax cobsutancy and it is faster, did that twice. I see this as being seperate from incorporating so, as everyone is affected by slow tax authorities.

But can you do business without the vat number?

Re: How I would start my next startup in Germany without a GmbH (2020)

#105

Post by hef19898 »

marcinzm wrote: post #96
nudpiedo wrote: post #54

Earlier quoted context omitted.

Nowadays it is 12,5 and it becomes the capital of the company which you can use to buy infrastructure and for the payroll.

12,500 is a lot more than 100 no matter where it goes to.

It is. But how is your prospective millionaire entrepreneur with his 100 buck corporation paying his bills? The 12.5 k from a GmbH can be used to pay your own salary for example. Or IT, or pay for AWS,...

Point being, even a dirt cheap corporation will need some money at one point.

Re: How I would start my next startup in Germany without a GmbH (2020)

#106

Post by SkyAndSand »

sokoloff wrote: post #70
SkyAndSand wrote: post #49

Earlier quoted context omitted.

.. and you are personally liable for anything damages caused by the business.

Surely the requirement that a limited liability company has some minimum assets is reasonable for exactly that reason. You wouldn’t want someone to be able to form a company whose liability was limited to couple hundred Euros of assets the company was formed with.

Well, isn't that exactly what is happening if you set up a US LLC or a UK LTD? You get limited liability and can set up the company with a couple hundred dollars or pounds. Why would that be a problem in Germany but not in these jurisdictions?

Re: How I would start my next startup in Germany without a GmbH (2020)

#107

Post by weinzierl »

hef19898 wrote: post #28
tgsovlerkhgsel wrote: post #6

I think this is one of the reasons why Germany doesn't have a startup ecosystem. People who are loosely playing with the idea of running their own tiny company (e.g. as a student side gig, not with the "I'm planning this like a businessperson and here's my plan how to turn it into a unicorn and how to exit" approach) take a look at the system and bureaucracy, and simply give up and forever write off the concept of ru…

It is stupidly easy to create a GmbH or UG, especially the UG. Also very cheap, if you push it two days are enough, will cost you around 100 bucks. And if you just want to run a side business, one that doesn't have the potential to ruin you, just run it as an independent income. You can even have your employees participate in your GmbH, either in enquity or profit. That most German start-ups don't simply means they w…

If you need a new GmbH really fast you can just buy one. There are companies and lawyers that are specialized in this kind of business and they keep a pool of registered GmbHs for founders to buy.

If you look up GmbHs in the central registry (Handelsregister) you will notice that many of them were founded by law firms and sold after a couple of months to the real founders. This is true even for (now) bigger and reputable companies.

Re: How I would start my next startup in Germany without a GmbH (2020)

#109

Post by hef19898 »

marcinzm wrote: post #101
hef19898 wrote: post #94

Earlier quoted context omitted.

I love how being compliant, taxes, accounting, other regulations seems to be such a hard thing for people looking for millions of VC money while litterally thousands of companies do so every day. I do see a pattern there so, after all ignoring regulations is still a viable business model for SV companies.

> people looking for millions of VC money Startups don't begin with million of VC money which is what we're discussing here.

But they do have more investor money than 25k, don't they? Plus, proper incorporation serves your investors as well. Guess why YC ibsists in a Delaware corporation? From what I know, those are totally free of charge neither.

Re: How I would start my next startup in Germany without a GmbH (2020)

#110

Post by cameronh90 »

hef19898 wrote: post #79
jFriedensreich wrote: post #24

i get ptsd reading about this and would rather die than having a gmbh again even though i had a holding ug from the start. what also no one tells you is that to get rid of these companies if it does not work out takes one to 2 years and costs a few thousand euros and many nerves you likely don't have anymore at that point. if i start again i am moving to estonia and start a OÜ.

As stated in another commebt, you can merge a GmbH with yourself. Sure, it costs money but is quite simple, fast and straight forward. I have no idea why start-up entrepreneurs fail at stuff your Döner shop or local garage succeed. Or tire change shop is part of a small local chain, every site is it's own GmbH. Just saying...

Shops have assets, small startups often don't. That makes the thousands of euros you need for reserves kinda pointless.
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