You should not start a startup in Germany at all. It has the highest taxes in the world. As a result 200.000 highly qualified people leave Germany every year. Those people are replaced with unqualified immigrants mostly causing additional costs thanks to the generous welfare system which makes sure that the taxes won't be lowered any time soon.
How I would start my next startup in Germany without a GmbH (2020)
141–150 of 238 posts
Re: How I would start my next startup in Germany without a GmbH (2020)
#142Earlier quoted context omitted.
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.
Ok, my one person start up had assets: My laptop, office gear, etc... Now imagine you have an office to pay. Or you are multiple people. Or you need some fancy hardware. All of that can be assets owned by the corp. And the exoebses, software etc..., can be paid of those 12.5/25 k as well.
This discussion proofs one point so, a GmbH shows that someone is serious about it.
Re: How I would start my next startup in Germany without a GmbH (2020)
#143Earlier quoted context omitted.
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?
IANAL but I think the answer for US single-member LLCs is that if you were ever to actually say, cause 100k of damage to somebody else's property through the actions of your single-person LLC and they were to take you to court, the judge would quickly find that the liability passes through to you, so it's not really all that different from a sole proprietorship (aka just doing business as yourself) in that regard.
I am also not a lawyer but for me it doesn't seem to be that easy to pierce the corporate veil https://www.nolo.com/legal-encyclopedia/personal-liability-p...
Re: How I would start my next startup in Germany without a GmbH (2020)
#144Earlier 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.
Distraction. Being compliant with all these regulations takes the very valuable focus away from the main goal of a startup: Finding product market fit. Established companies have no problem being compliant because they already have everything setup.
This level of compliance is so low that every business in Germany manages it. It is dirt cheap to outsource to a tax advisor, and in doing so no distraction at all.
Product market fit doesn't matter if you are unable to run a business.
Re: How I would start my next startup in Germany without a GmbH (2020)
#145Earlier quoted context omitted.
Well, I had a UG as holding company in Germany and even though the company was basically dormant (besides holding shares in another entity) I still had file yearly accounts which cost about 1000€ / year. Plus another 200€+ for IHK, 100€ for Bundesanzeiger, GEZ / Rundfunkbeitrag etc. All for a company that didn't really do anything. Would you really argue that this is easy / good practice? Because in my understanding…
I never filed yearly accounts for the UG so afr, the first two years you don't have to. IHK sucks, I agree. GEZ isn't mandatory if you register your UG where you live, after all you pay already. All in all, I'd say cost of doing business. What's next, do we atart complaining that Lenovo isn't providong free laptops? Or that office space costs money?
> I never filed yearly accounts for the UG so afr, the first two years you don't have to.
I've never heard about this and also can't find any sources for that when googling. Could you post an article that describes why a UG wouldn't have to file a "Jahresabschluss" in the first two years?
Re: How I would start my next startup in Germany without a GmbH (2020)
#146> Kebab costs 2€ This is a very very outdated price, and as far as I remember it was only possible due to some very doggy things going on. Even a few years back the price was around 3.5€ (in cheaper areas of Germany). Before COVID the price was more around 4-4.5€. Now it's 6€. (Prices based on cheaper areas of Germany).
Similar to what I wanted to comment. 30 years ago I knew some places selling for 2,00DM or 2,50DM. 2 years ago it was 4,50EUR, now it’s 6,00EUR.
Re: How I would start my next startup in Germany without a GmbH (2020)
#147Oh God, this thread will be the usual Germany bashing. There is nothing fundamentally wrong with how Germany handles corporations. The German corporate law is actually pretty good. If I could change two things, I would make IHK membership optional and allow free filings of the financial reports. These are changes that a willing government could implement in a heartbeat. And I think no country should handle corporatio…
The filing is free (you can do it yourself), but most types of corporation require attestation which can cost more than 1k per year.
Re: How I would start my next startup in Germany without a GmbH (2020)
#148> The goal of an UG is to have limited liabilities from the start, however you need to convert it into a full GmbH, once you have generated €25.000. It still baffles me, that you need to buy your own shares in Germany, in order to receive the “status” and protection of being a fully incorporated company. I hope I am not too far off the truth, please correct me if I am: "mbH" in "GmbH" means "mit beschränkter Haftung"…
This blog post is two years old. In 2019–20, I think I could get a decent Döner for €3,50 in Berlin (depending heavily on the neighborhood, specific location, etc.). Prices have come up a fair bit since then. But yeah, €2 is eyebrow-raisingly low.
Re: How I would start my next startup in Germany without a GmbH (2020)
#149Earlier quoted context omitted.
Distraction. Being compliant with all these regulations takes the very valuable focus away from the main goal of a startup: Finding product market fit. Established companies have no problem being compliant because they already have everything setup.
This level of compliance is so low that every business in Germany manages it. It is dirt cheap to outsource to a tax advisor, and in doing so no distraction at all. Product market fit doesn't matter if you are unable to run a business.
I don't think 1000€ per year for a yearly closing for a dormant company is "dirt cheap", but we might have different definitions of what constitutes "cheap".
Re: How I would start my next startup in Germany without a GmbH (2020)
#150Earlier quoted context omitted.
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?
IANAL but I think the answer for US single-member LLCs is that if you were ever to actually say, cause 100k of damage to somebody else's property through the actions of your single-person LLC and they were to take you to court, the judge would quickly find that the liability passes through to you, so it's not really all that different from a sole proprietorship (aka just doing business as yourself) in that regard.
In the US you’re responsible for your own personal actions regardless of LLC existence or not.
If you’re selling a product, the LLC should protect you from liability caused by the product. (With many caveats)
But the LLC won’t protect you from your personal actions