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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

#131

Post by NoboruWataya »

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.

I have a hard time believing there are many scams that have succeeded specifically because the scammer was permitted to set up an LLC with nominal share capital (at least in the last few decades). In the business world it is pretty standard to do due diligence and get collateral for any material exposure to an LLC. So the people who would be taken in would mainly be the vulnerable and uneducated who could likely be scammed without an LLC. There are additional protections against scams via various laws relating to bankruptcy, creditor protection and "piercing the corporate veil" (https://en.wikipedia.org/wiki/Piercing_the_corporate_veil).

Not to mention that the minimum capital requirement is unlikely to deter any determined scammer. All you're really doing is making life slightly difficult for scammers who can't scrape together €12.5k in capital, while simultaneously also making life hard for all the legitimate contractors and (would-be) entrepreneurs who can't scrape together that amount.

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

#132

Post by mk89 »

ricc wrote: post #124
mk89 wrote: post #108

Earlier quoted context omitted.

> Soon you'll be able to use a credit card in most shops even! Not sure where you people live, but this myth has to stop, eventually. I can literally count on one hand the n. of shops NOT accepting cards - it's most of the times shops which, I guess, use cash to have flexibility in their accountings :)

“Accepting cards” is not the same as “accepting credit cards” though… A lot of them only accept girocards and not credit cards…

I don't have enough experience to speak about CC in Germany, but I don't see why a Rewe or ... boh, Aldi, Mcdonalds, etc should prevent that. I am a bit surprised, to be honest.

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

#133

Post by [deleted] »

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.

[deleted]

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

#134

Post by toast0 »

klohto wrote: post #126
toast0 wrote: post #118

Earlier quoted context omitted.

From the article you linked in that comment[1], it seems like this exit tax only applied to companies where you own 1% or more? and it's structured as the capital gains tax, but due now, so on the current value minus your cost basis. The US has an exit tax if you renounce citizenship, and it's assessed on your entire net worth. If the article you linked is accurate, this german tax seems much more reasonable. EDIT: a…

how are you comparing renouncing citizenship with temporarily leaving the country

I'm comparing 'exit taxes'. But also if you leave Germany, you're no longer subject to German income tax, and you have to both leave the US and renounce citizenship to become no longer subject to US income tax.

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

#135

Post by pests »

klohto wrote: post #126
toast0 wrote: post #118

Earlier quoted context omitted.

From the article you linked in that comment[1], it seems like this exit tax only applied to companies where you own 1% or more? and it's structured as the capital gains tax, but due now, so on the current value minus your cost basis. The US has an exit tax if you renounce citizenship, and it's assessed on your entire net worth. If the article you linked is accurate, this german tax seems much more reasonable. EDIT: a…

how are you comparing renouncing citizenship with temporarily leaving the country

I think the wording was unclear as that's what I thought too, that "leaving" meant for good, and maybe there was a way back - hence the temporary part.

A tax on simply exiting the country is a very foreign concept to Americans I would assume.

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

#136

Post by philwelch »

yau8edq12i wrote: post #43
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.

Even the USA does not have harmonized company law. Pretty much anything except what concerns the IRS says is in the hand of the individual states. Why would you expect the EU to do so?

Someone in the US can start a Delaware LLC or C corporation without living in Delaware. Can someone living in Germany set up an LLC or corporation in Denmark or Estonia instead of Germany?

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

#137

Post by ricc »

rglullis wrote: post #128
ricc wrote: post #124

Earlier quoted context omitted.

“Accepting cards” is not the same as “accepting credit cards” though… A lot of them only accept girocards and not credit cards…

And credit cards in Germany are not "credit" cards as well. At least the one I got from Sparkasse does not let you hold a balance and must be paid in full every month.

Not sure about those, but I got mine around 2-3 years ago from gebührenfrei.de, which is from Advanzia Bank. Seems fine so far…with a minor disclaimer that I don’t really use it much. :-)

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

#138

Post by DyslexicAtheist »

ricc wrote: post #127
TillE wrote: post #62

Earlier quoted context omitted.

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.

Digitalisierung means one receives a PDF form via email that he should print out, fill out, scan, and then email back again. X-D

surely you meant "... and then fax back again. X-D"

?

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

#139

Post by freyfogle »

twixfel wrote: post #87
alphager wrote: post #79

Earlier quoted context omitted.

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.

OK but how is it that other countries get by without them for founding LLCs? Are there countless scams going on in the UK surrounding limited company for example since you don't need a notary there? There's often lots of post hoc justifications in Germany for "why it is that way" (and has to be that way). But nobody ever seems to stop and think: ok but the rest of the world seems to get by OK without these reams and…

I now have a German GmbH and had a UK Ltd in the past for 10 years. Definitely there is more seriousness/trustworthiness to a GmbH.

I am not sure there are "countless" scams in the UK, but yes, in 10 years of commercial operation did come across a few oddities. Example - a customer (UK Ltd) who declared bankruptcy owing us a money and then then next day founded a new Ltd company and tried to act like he didn't owe us the money because it was a new entity.

See https://en.wikipedia.org/wiki/Pre-packaged_insolvency

I have not come across this kind of thing in Germany.

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

#140

Post by ricc »

mk89 wrote: post #132
ricc wrote: post #124

Earlier quoted context omitted.

“Accepting cards” is not the same as “accepting credit cards” though… A lot of them only accept girocards and not credit cards…

I don't have enough experience to speak about CC in Germany, but I don't see why a Rewe or ... boh, Aldi, Mcdonalds, etc should prevent that. I am a bit surprised, to be honest.

Big chains and enterprises, for sure. But there’s still a lot of SMBs not accepting credit cards.
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