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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

#71

Post by pgeorgi »

TillE wrote: post #62
robert_foss wrote: post #60

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.

Germany loves endless bureaucratic paperwork which absolutely must be done in person (and good luck getting an appointment in Berlin), despite the many years of bleating about Digitalisierung which has apparently amounted to nothing.

> and good luck getting an appointment in Berlin

It's our failed state, so what do you expect?

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

#72

Post by throwaway11460 »

seszett wrote: post #63
throwaway11460 wrote: post #38

Earlier quoted context omitted.

Given the domination of Germany and France in EU, thank the universe it didn't. Signed, a citizen of an EU state where you can create a company by digitally signing one form and paying the equivalent of $300.

It's about the same in France by the way, except that it's free.

Cool! My bad assuming without checking.

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

#73

Post by almostnormal »

pintxo wrote: post #54
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.

The solution is easy: Create a small company to own the property. That company can be sold much more easily than the property itself. It also avoids the tax on propery purchase.

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

#74

Post by pgeorgi »

ofrzeta wrote: post #51
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...

correction: 25% of the yearly profit

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

#75

Post by realusername »

throwaway11460 wrote: post #72
seszett wrote: post #63

Earlier quoted context omitted.

It's about the same in France by the way, except that it's free.

Cool! My bad assuming without checking.

France is much more digitalized compared to Germany, you can't really put them in the same basket.

The issue on the French side is more that they put the exact same excruciating procedures they had in paper online and didn't simplify too much in the process.

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

#76

Post by mac-mc »

awesomeMilou wrote: post #34
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 must put limited liability out of reach of so many people. That's the entire point. The concept that any idiot can start an LLC with no collateral (which the 25k are) is completely, absolutely, mind bogglingly bonkers to us Germans. Sounds like a scam imo.

Companies are the legal ownership equivalents of shipping containers, and enabled a revolution in humanity despite being so simple, much like shipping containers. There is something up with your laws if that is not what they effectively act as to need collateral like that.

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

#77

Post by cladopa »

RicoElectrico wrote: post #20

I wonder: why EU did not try to somewhat harmonize company law? I can understand that things like tax code, penal code would not benefit from unification across disparate societies, but companies seem like a ripe target. This should have begun 20 or so years ago.

"Harmonizing" is a great name for "absent of competition" or "collusion to raise taxes" and it is the worse thing that could happen to Europe.

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

#78

Post by raverbashing »

tdullien wrote: post #46

I have founded a company in Germany in 2004 and sold it to Google in 2011. I started an AG in Switzerland in 2019 and organized a Delaware-Flip therafter. Most of the described steps are also necessary for a Delaware incorporation, and I found the process of incorporating a nothingburger. 1) The choice between a limited liability construct or a pass-through construct exists everywhere. My advice was always: Separate…

Thanks for this reality check

Yes the process in Germany can be improved a lot. But a lot of it is similar or equivalent to process in other places

> I mean the author even complains that the notary uses your passport to authenticate you (?!).

Yeah I had skipped this when reading the article, sorry it really sounds like the author doesn't know much about the basics of gov processes

"Don’t forget your ID or passport because that’s their foolproof way of identifying you"

Yes, that's exactly what it is. Your passport is official ID

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

#79

Post by alphager »

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…

The Notar does much more than just read the contract; he is liable for the correct administration of the transfer of ownership (done by a three phase process which guarantees that the seller cannot get the money without transferring the property and the buyer cannot get the property without selling the money).

The concept of title insurance doesn't exist in Germany as the Notar eliminates the risk.

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

#80

Post by boulos »

throwaway11460 wrote: post #38
RicoElectrico wrote: post #20

I wonder: why EU did not try to somewhat harmonize company law? I can understand that things like tax code, penal code would not benefit from unification across disparate societies, but companies seem like a ripe target. This should have begun 20 or so years ago.

Given the domination of Germany and France in EU, thank the universe it didn't. Signed, a citizen of an EU state where you can create a company by digitally signing one form and paying the equivalent of $300.

Example: https://e-estonia.com/solutions/ease_of_doing_business/e-bus...
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