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How to found a company in Germany: 14 "easy" steps and lots of pain

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Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#21

Post by morkalork »

xxmarkuski wrote: post #18

To be honest, I don't think much of notaries and believe that they stifle innovation and harm the German economy, especially SMEs, but also clubs and citizens. For example, the purchase or sale of a property can only be carried out with a notary who reads the purchase contract for both parties. For this service, he charges a fee of around 1.5% of the sale price. The entire profession is strictly protected by law and…

Wow and I thought realtors getting a % cut on sales was a scam, at least in NA when you get to the notary, it's a flat fee.

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#22

Post by bouncing »

yau8edq12i wrote: post #4
bouncing wrote: post #2

Not to brag, but there are so few things to actually feel some civic pride for in America, and business registration is one of them, so I guess we have that. I can get an IRS EIN (tax ID), register an LLC, obtain a sales tax license (only required for selling stuff), and open a business checking account in about 2 hours in Colorado. Someone who knows what they’re doing and doesn’t spend time researching banking optio…

Unless you're opening companies on a daily basis to evade taxes or whatever, I fail to see why you would need the process to be that fast. Because with such short delays, nobody will have actually checked anything, so the only winners are fraudsters, in the end.

Your individual identity is tied to the EIN, LLC, and bank account. I doubt it’s that useful for tax evasion.

Each little step of friction discourages some entrepreneurs and adds barriers to entry for incumbents to prevent competition.

And just in general, not doing something very often is not a valid reason for making it needlessly expensive and time consuming.

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#23

Post by blackhawkC17 »

yau8edq12i wrote: post #4
bouncing wrote: post #2

Not to brag, but there are so few things to actually feel some civic pride for in America, and business registration is one of them, so I guess we have that. I can get an IRS EIN (tax ID), register an LLC, obtain a sales tax license (only required for selling stuff), and open a business checking account in about 2 hours in Colorado. Someone who knows what they’re doing and doesn’t spend time researching banking optio…

Unless you're opening companies on a daily basis to evade taxes or whatever, I fail to see why you would need the process to be that fast. Because with such short delays, nobody will have actually checked anything, so the only winners are fraudsters, in the end.

Ease of doing business is one of the top things to look at in any country.

It’s on law enforcement and regulators to counter fraudsters. Ordinary citizens should not bear pain because of them.

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#24

Post by cgh »

bouncing wrote: post #2

Not to brag, but there are so few things to actually feel some civic pride for in America, and business registration is one of them, so I guess we have that. I can get an IRS EIN (tax ID), register an LLC, obtain a sales tax license (only required for selling stuff), and open a business checking account in about 2 hours in Colorado. Someone who knows what they’re doing and doesn’t spend time researching banking optio…

Canada is a little slower. It takes one day and $200 to incorporate:

https://ised-isde.canada.ca/site/corporations-canada/en/serv...

For an extra $100, there’s a four hour express service.

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#25

Post by bouncing »

yau8edq12i wrote: post #8
_dain_ wrote: post #5

Earlier quoted context omitted.

Every little speed bump you put in the way will deter some people on the margin.

If you have 25k€ of capital but get flustered because the state wants to make sure that you are not opening a shell company for someone else and that your articles of incorporation are legally valid, then maybe you need to rethink something.

I had my first LLC in grade school over a summer. I didn’t make a ton of money, but I did earn enough for my first real computer, which launched my interest in programming.

When my wife started her current business as a consultant, she was living off her savings from teaching high school. If you think every entrepreneur has €25k of capital, you need to reevaluate what your country thinks of entrepreneurship.

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#26

Post by blablabla123 »

Fun fact, GmbH is not about protection of getting sued. (Because there's "Durchgriffshaftung") It's useful for companies that trade physical goods and e.g. when a vendor that was already paid got bankrupt it won't affect the finances of the founders. Although it shows to the outside world that 25 k€ have been paid and it's not a 1€ company. But in case of impeding bankruptcy it must either be resolved or declared otherwise things go bad. ("Insolvenzverschleppung" - the punishments are a little draconic) GmbH is really a lot of effort to maintain and expensive. The paperwork for UG "Mini GmbH" is basically the same. If I would try co-founding again, I'd probably not do a UG or GmbH.

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#27

Post by fl7305 »

jFriedensreich wrote: post #7
fl7305 wrote: post #6

What does the opposite look like in Germany? Meaning, shutting down a Gmbh? In Sweden, you can get this done in a matter of days, where you sell the shares of your corporation for the net value minus a fee of about $1000.

its one to 2 years of pain. my gmbh shut down also cost 15 000 and ultimately led to me leaving the country.

That sucks. I can see how it costs thousands of euros per year to do the annual financial statements, but 15 000? Is that common, or were there special circumstances?

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#28

Post by leononame »

jFriedensreich wrote: post #7
fl7305 wrote: post #6

What does the opposite look like in Germany? Meaning, shutting down a Gmbh? In Sweden, you can get this done in a matter of days, where you sell the shares of your corporation for the net value minus a fee of about $1000.

its one to 2 years of pain. my gmbh shut down also cost 15 000 and ultimately led to me leaving the country.

Ugh, tell me about it. I'm in the process of closing one and have been for 1.5 years now. I think we're close, but who knows. I certainly don't

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#29

Post by manuelmoreale »

davidw wrote: post #16
OtherShrezzing wrote: post #15

Minimum initial share capital of €12,500 to found a company where liability is limited to the firm seems like a very regressive impediment to business. For comparison in the UK, there's a £12 registration fee, and a £1 (one pound) minimum initial share capital. It must put limited liability out of reach of so many people.

It's extremely regressive. I started an effort to reform things in Italy and... it kinda sorta got some actual results, although not quite as much as I'd hoped https://blog.therealitaly.com/2015/04/16/fixing-italy-a-litt... How many days of wages is 12,500 for the average worker? In the US, even for someone making minimum wage, you could pretty quickly cover the costs of forming an LLC, let alone someone making more.

Isn’t that already an option in Italy with the SRL Semplificata and initial capital starting at 1€?

Re: How to found a company in Germany: 14 "easy" steps and lots of pain

#30

Post by namaria »

morkalork wrote: post #21
xxmarkuski wrote: post #18

To be honest, I don't think much of notaries and believe that they stifle innovation and harm the German economy, especially SMEs, but also clubs and citizens. For example, the purchase or sale of a property can only be carried out with a notary who reads the purchase contract for both parties. For this service, he charges a fee of around 1.5% of the sale price. The entire profession is strictly protected by law and…

Wow and I thought realtors getting a % cut on sales was a scam, at least in NA when you get to the notary, it's a flat fee.

In Brazil notaries get a cut of real estate deed transfers, and the position was hereditary until the 1990s.
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