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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)

#171

Post by SkyAndSand »

ng55QPSK wrote: post #165
codethief wrote: post #152

Earlier quoted context omitted.

> 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. Having gone through the process (and a rather smooth one at that), I can say with absolute confidence that this is not true at all. 1) Talking to the notary alone and arranging the details (articles of organization, fees – as the notary might try to rip you off –, and t…

point 1) "as the notary might try to rip you off" i'd like to see an example. The position of the notary is the neutral one on signing deals OR notfifying the documents you sign to give you an undisputable legal binding document. Any notary trying to rip you off is walking dangerously close to immediately loosing his job - forever.

I had the same assumption. However the last notary that I worked with didn’t hand in documents in time (which caused lots of trouble), handed in incorrect documents and simply did not answer to emails or calls for weeks.

He only started to act when I used my lawyer to threaten him. Even then my lawyer said that it would be very hard to start legal proceedings against the notary.

If you think notaries are 100% trustworthy you should also have a look at https://www.tagesspiegel.de/berlin/millionen-immobilie-in-be...

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

#172

Post by daanlo »

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…

Germany, particularly Berlin, have a pretty vibrant startup eco-system. If you are just trying ideas, there is no need to register a business (legally you only have to do this once you intend to follow through long term). You can register a business for 35€ - most cities offer this online. Registering a limited liability company is a little more complicated (you need a 1h appointment with a notary), but can be done from 500€ onwards. If you plan to do less than 50.000€ in revenue this year you qualify as a micro business and don‘t need to file or pay VAT. You only need to file an annual account within a year of the financial year ending. Cost of this starts at around 500€. Our legal system and corporate culture is set up in a way that you are very unlikely to be sued for damages. So even medium sized companies (several million in revenue) frequently operate as full liability companies.

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

#173

Post by hef19898 »

cameronh90 wrote: post #159
hef19898 wrote: post #142

Earlier quoted context omitted.

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.

Yeah but in the modern world you often don't have any of that except a laptop or two, and even they are often personal devices in a small start-up. I founded a start-up with a friend and we had zero assets - just Office 365, AWS, managed office and personal devices.

But you do see why, geneally speaking, incorporating a business is necessary and required, do you? Because otherwise this discussion is kind of pointless.

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

#174

Post by codethief »

ChuckNorris89 wrote: post #98
wewxjfq wrote: post #88

Earlier quoted context omitted.

> In addition I've never encountered as many scummy companies (GmbH or otherwise) as in Germany. Corporate rules and culture are both complete trash. That's the quintessential HN comment I'm talking about. Just hasty generalizations and accusations. Tiresome.

Anecdotally, I've also never encountered as many scummy and cheating companies and GmbHs as in Germany. Granted it's just another data point but I feel there's real substance behind this Germany bashing and it's not uncalled for. Also, Germany is the only EU country I've encountered where scummy law companies break citizens privacy hand in hand with ISPs to spy on your internet traffic and send you fines if you torre…

> Anecdotally, I've also never encountered as many scummy and cheating companies and GmbHs as in Germany.

Compared to where?

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

#175

Post by mbeex »

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…

> Even becoming an independent contractor is fraught with many of the same hurdles.

It depends, there is no simple entity "independent contractor". If you can run your business as Freiberufler - roughly but not quite a freelancer - you may have found a pretty lightweight framework - even compared to other jurisdictions. Simpler accounting, no need for balance sheets and therefore for a tax advisor in most cases (still recommended). Liability can be largely limited by insurance, depending on the field of business.

I'm doing this for over 20 years and I simply have no need to own any kind of corporation.

Of course, YMMV.

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

#176

Post by SkyAndSand »

gyulai wrote: post #163
SkyAndSand wrote: post #83

Earlier quoted context omitted.

I couldn't agree more. The whole situation is extremely complicated, especially if founders from multiple countries become involved. If you had to do it again, how would you incorporate in the future (basically what I am trying to figure out here https://news.ycombinator.com/item?id=31620700 )?

* Set up Topexpress UG (haftungsbeschränkt) with €2k in capital but no more. This needs to exceed the cost for the notary, otherwise it is technically insolvent as soon as the notary performs his services on behalf of that entity. It is 100% owned by you, Max Mayer. * Set up "Topexpress UG (haftungsbeschränkt) & Co KG", a limited partnership (KG) with a limited partner who is you, Max Mayer, and a general partner who…

Thanks for the detailed answer.

I actually don’t live in Germany but this is definitely an interesting setup. I might actually run it by my German tax consultant to see what he thinks about it just out of curiosity :)

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

#177

Post by ng55QPSK »

codethief wrote: post #170
ng55QPSK wrote: post #165

Earlier quoted context omitted.

point 1) "as the notary might try to rip you off" i'd like to see an example. The position of the notary is the neutral one on signing deals OR notfifying the documents you sign to give you an undisputable legal binding document. Any notary trying to rip you off is walking dangerously close to immediately loosing his job - forever.

I would have to look up the exact details but I was basically following the standard "Musterprotokoll" to found my company, with one tiny difference/change somewhere. Well-established court rulings said that this change didn't make a difference regarding the notary fees. The notary still charged me for it. When I pointed out the court rulings to them, their response was basically "Right, sorry, we forgot". I have hea…

I see. But this sounds like his/her office made a mistake in calculating the fee, but let's say this far away from "ripping off" and can be cleared in one telephone call.

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

#178

Post by codethief »

hef19898 wrote: post #164
codethief wrote: post #160

Earlier quoted context omitted.

> I never filed yearly accounts for the UG so afr, the first two years you don't have to. Could you provide a source for this claim? In a best-case scenario, where you have founded your company on Jan 1 2021, you so far would have still had to - hand in your initial balance sheet at the time of founding - hand in your Umsatzsteuervoranmeldung every month. Moreover, you will definitely have to - hand in your Umsatzste…

Well, no initial balance sheet required. Taxes are filed, of course. VAT had to be decleared, in theory, every month. You get reminders, so it can also be done for multiple months. Now, due to lack of revenue, I have to file a zero VAT declaration quarterly. And your deadlines are longer than if you eork with a registered tax advisor. That's why I said so far, I'll have to do all that this year, the 2021 balance shee…

> Well, no initial balance sheet required

The law very clearly disagrees with you:

https://www.gesetze-im-internet.de/hgb/__242.html

> And your deadlines are longer than if you eork with a registered tax advisor.

True. If you're paying a tax advisor, you don't really care about the deadlines and all the paperwork, anyway, though. You just pay people to do all that for you.

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

#179

Post by hef19898 »

brtkdotse wrote: post #153
ChuckNorris89 wrote: post #80

Earlier quoted context omitted.

>If you never make any profit Sure but then that's not really anyone's goal starting a company in Germany. So ultimately you will have to deal with this issues if you don't fancy being homeless.

Payroll is a deductible cost and not taxed as profit

Sometimes it is funny how clueless people can be about the simplist things around corporations.

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

#180

Post by ng55QPSK »

SkyAndSand wrote: post #171
ng55QPSK wrote: post #165

Earlier quoted context omitted.

point 1) "as the notary might try to rip you off" i'd like to see an example. The position of the notary is the neutral one on signing deals OR notfifying the documents you sign to give you an undisputable legal binding document. Any notary trying to rip you off is walking dangerously close to immediately loosing his job - forever.

I had the same assumption. However the last notary that I worked with didn’t hand in documents in time (which caused lots of trouble), handed in incorrect documents and simply did not answer to emails or calls for weeks. He only started to act when I used my lawyer to threaten him. Even then my lawyer said that it would be very hard to start legal proceedings against the notary. If you think notaries are 100% trustwo…

You cannot secure any system against intentionally criminal behaviour - and it looks like the actual transfer had started an investigation.
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