Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

eidel.io

Post reply on HN
Print view View original

51–60 of 1001 posts

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

#51

Post by ofrzeta »

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.

Since 2008 you can found a "UG" ("Mini GmbH") that doesn't require that much upfront capital. It can be foundet with 1 Euro. The catch is that you need use 25% of your yearly revenue until you reached the 25k of a proper GmbH.

https://www.firma.de/en/company-formation/what-is-a-ug-haftu...

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

#52

Post by _dain_ »

yau8edq12i wrote: post #39
_dain_ wrote: post #11

Earlier quoted context omitted.

I disagree. 25k euro is simultaneously a large and not a large amount of money. It's big enough to lock out many potential small business founders. But also many ordinary inexperienced people can have that amount of money up front, yet still be deterred by the complexity of a 6 week long incorporation process as described in this article. Especially in the early days of a company when your stress level is already thr…

> It's big enough to lock out many potential small business founders. They can open an Einzelunternehmen (sole proprietorship) instead. You shouldn't (and cannot) go all the way to the complexities of a GmbH (LLC) if your company is that tiny. > But also many ordinary inexperienced people can have that amount of money up front, yet still be deterred by the complexity of a 6 week long incorporation process as describe…

>They can open an Einzelunternehmen (sole proprietorship) instead.

Sole proprietorship doesn't have liability protection. That's not a small thing.

>You shouldn't (and cannot) go all the way to the complexities of a GmbH (LLC) if your company is that tiny.

"[Thing] is too complex, don't bother with it" is not an argument against making [thing] less complex. It's actually just a restatement of the problem!

Other countries make it easy to set up a limited company. UK, US, Singapore, they're all just a token fee and a handful of forms. I see no reason for Germany to make it so difficult as described in the article.

A lot of successful companies were started by broke college grads out of their dorms; they would never have gotten off the ground if they had to scrounge together the equivalent 25k euros before even getting started. Hell, I don't have a spare 25k lying around and I've been working full time for 4 years.

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

#53

Post by xenospn »

Scarblac wrote: post #48
paleotrope wrote: post #44

Earlier quoted context omitted.

Do you want to take the risk of losing your home just to start a business?

Maybe the real difference is that such things might be possible in the US, but sound laughable in Europe? What would you need to mess up to be liable for huge sums as a single consultant company?

There’s tax benefits and other business-only products that require a business entity.

Imagine if you’re a consultant and for whatever reason, you get sued or worse. That’s what the LLC is for.

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

#54

Post by pintxo »

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…

Technically, there is competition. You are free to choose whichever notary you want. But pricing is legally regulated, so you will pay the same price everywhere.

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

#55

Post by blablabla123 »

awesomeMilou wrote: post #33
blablabla123 wrote: post #26

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 oth…

> ("Insolvenzverschleppung" - the punishments are a little draconic) The concept of declaring bankruptcy is well known in most western jurisdiction, as is the criminal practice of delaying bankruptcy. Believe it or not, in most of the developed world you can't just have a company go tits up and expect to go out of there scot-free. > Durchgriffshaftung I've never heard of this concept before, but from what I can gathe…

I don't know the implications outside of Germany although looking in the Wikipedia article it sounds it's an especially big deal here. If I recall it correctly from a back then mandatory course I did about it, it can even happen for an unpaid parking bill on an empty account.

I'd assume so but probably most legal matters are settled outside of courts. Also looking at it the other way around, it would be pretty silly if creating a GmbH would create immunity. Indeed I doubt it's applied very often but when trying new territory regarding copyright, it's probably worth a consideration that one may still be personally liable.

That said, my point is just that UG/GmbH is overkill in many cases especially if the company isn't making any serious money. You can invent a name, go to the town hall, fill a form so you can do business with it and it's possible to legally receive payments. Founding a GbR is a quite informal thing

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

#56

Post by _dain_ »

manuelmoreale wrote: post #29
davidw wrote: post #16

Earlier quoted context omitted.

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€?

I think that guy's campaign is what resulted in SRL Semplificata in the first place

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

#57

Post by bouncing »

Scarblac wrote: post #48
paleotrope wrote: post #44

Earlier quoted context omitted.

Do you want to take the risk of losing your home just to start a business?

Maybe the real difference is that such things might be possible in the US, but sound laughable in Europe? What would you need to mess up to be liable for huge sums as a single consultant company?

It’s unlikely you’ll lose it all, but suppose you write a clever app — maybe a cvs editor.

Suppose you find out your cvs editor infringes on a patent and you’re liable. Suppose some business suffers data loss and sues. These things do happen in Europe too.

Also, it’s just a matter of professionalism. A sole proprietor isn’t very professional and many medium-size businesses won’t do business with sole proprietorships.

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

#58

Post by fl7305 »

leononame wrote: post #28
jFriedensreich wrote: post #7

Earlier quoted context omitted.

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

In Sweden you can sell your company to a specialized company that will dissolve it for you (for example this one: https://www.standardbolag.com/services/liquidation). This can be done in a matter of 1-2 weeks.

In Sweden, you can of course also choose to dissolve it yourself, but nobody does that since it takes years, and it's pretty cheap to let someone else take care of it for you.

It sounds like the same service is not available on the market in Germany?

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

#59

Post by davidw »

_dain_ wrote: post #56
manuelmoreale wrote: post #29

Earlier quoted context omitted.

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

I think that guy's campaign is what resulted in SRL Semplificata in the first place

Yes, that's correct. Other people did the real, heavy lifting to get things done, but my idea caught their attention.

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

#60

Post by robert_foss »

Having founded a company in Germany, I would never under any circumstances do it again.

Notaries should not exist, and could be replaced by a simple website.

It's all incredibly tedious and slow, and there are lots of reoccurring work and fees. Closing a company takes 2-3 years too, even if there are no irregularities.

Post reply on HN