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Founding a company in Germany: €9600, 152 days and I still can't send an invoice

paolino.me

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Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#451

Post by toast0 »

9dev wrote: post #435
WarmWash wrote: post #409

Earlier quoted context omitted.

One of the major reasons US consumers shop with megacorp over small business is because of the no hassle returns.

Exactly my point. In Germany I can order from the smallest of webshops without even reading their return policy, because I am guaranteed favourable terms by law.

In the US, if the remote merchant doesn't accept a return (or is non responsive), a credit card chargeback would be in order.

The customer almost always wins those. And the merchant always has to pay a fee for the chargeback, even when they win, so they're incentivized to avoid them.

The merchant agreement isn't as effective as a well enforced law, but it's pretty close.

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#452

Post by notanormalnerd »

rob74 wrote: post #165

> Which leaves the only real question. Why 25,000 at all? It is my company and my risk. If I want to start with nothing, that is my call, not a toll the state collects before it will let me try. And the cheap door has a price of its own: to some clients, “UG” reads as “not serious,” and they would rather deal with a GmbH. The structure built to let me in quietly marks me for using it. The 25,000 is there to make sure…

I just did a quick check:

The 25.000€ hasn't been raised since the early 1980s. (50.000 DM back then) So to have the same liability today, you would have to put down 65.000€.

So it has gotten increasingly cheaper to start a GmbH in Germany.

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#453

Post by nradov »

wavemode wrote: post #369
coffeebeqn wrote: post #321

Earlier quoted context omitted.

> sometimes shit happens and debts go unpaid What’s wild is that this is pre-debt. The banks will have their own risk math for you so it’ll be a completely separate set of hoops before you get to be in debt as a company. Most will not even talk to you if you have 0€ in the business account. I don’t feel like a company with no assets or income can do that much damage to their societies. Also as a small company in the…

There are ways to go into debt without dealing with banks. Any time you use something and are charged afterwards, it's a debt (which you could fail to pay by being broke by the time the invoice arrives). Common example - rent/lease. Or gas/electricity.

Those vendors can always require payment in advance, or a guarantor.

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#454

Post by jeffreyrogers »

The €25k working capital requirement seems a little prescriptive to me (in the US there is nothing like that for non-finance industries, although some businesses need bonds which pay clients/customers if you fail to perform), but it's also the case that most businesses are going to need more than 25k in working capital once they're beyond the startup phase, and outside of tech you typically have working capital requirements that grow with increasing revenue, meaning your accounting profits can be growing but you can still run out of cash since you spend it before you can collect it.

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#455

Post by anaisbetts »

dgellow wrote: post #400
earcar wrote: post #48

Earlier quoted context omitted.

That is refreshing to hear. Unfortunately I can't get out because of exit tax, an unrealized capital gains tax for the privilege of leaving the country. That is way worse than what I mention in this post and will get its own post soon.

Is it different from the tax you would face if you just realize your gains?

The exit tax doesn't apply to "gains", it applies to the "value of your company" which is calculated in a way that often means you will owe thousands or even millions in money you don't have, and at no time had.

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#456

Post by Aachen »

NooneAtAll3 wrote: post #347
onli wrote: post #341

Earlier quoted context omitted.

But you can't. It's not like you can bribe the bureaucrat working on your form, and there is no regular fast pass.

> It's not like you can bribe the bureaucrat working on your form are you trying to say "bureaucrat can't speed up" or are you doubting someone physically can't give someone else some cash?

As someone living in Germany, I would be very surprised if someone legit manages to bribe their way to skip a step somewhere. At an institutional level, perhaps it's more surprising if it never ever happens anywhere at all; but at an individual level, your particular case hitting a bribeable person and you knowing of it seems like worse odds than seeing a shooting star during a solar eclipse. Maybe if you are close family, or close enough plus a sob story, the person might have the ability to handle your case first; that sounds like something the computer system would allow in order to avoid getting stuck on a case they can't currently work on (for whatever reason) at the head of the queue. They're probably not the only step though so it might not help much

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#457

Post by nonethewiser »

mplappert wrote: post #297

There’s a lot of confusion here: - There is no double taxation if you just pay yourself a salary (since it’s a normal business expense). If you want to take money out of the company flexibly, a GmbH is the wrong structure. - I’ve never heard of anybody doing an UG/GmbH + KG to get started. This is highly unusual. Most people either do just a simple UG or maybe they set up a holding structure with two separate GmbH /…

You don’t think the barrier to entry is a valid criticism?

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#458

Post by kuschku »

scarmig wrote: post #41
sevenzero wrote: post #20

Earlier quoted context omitted.

So basically you go for the legal stuff only really big companies use (instead of changing once its necessary) because you dont believe in your own product and dont want to be held liable, got it.

Do people in Germany see limited liability as some kind of crazy thing only a scammer would want?

If you just want limited liability, you'd go with a simple UG (takes a week and costs 600€, but if you do it right it takes 2-3h and costs 300€).

If you additionally want to avoid being taxed when you sell stock, the entire company, or transfer it to another country, you'd create two UGs, one as the primary company, the other as a holding. That takes 2-3h for both and costs typically around 800€, but can be had for as little as 400-500€.

This is what previous German YCombinator startups have gone with and recommended in the past.

Going one step further, because a UG is so easy to start, banks will refuse to loan you money in the first year, so you can only raise money by selling shares. If you want to avoid that, you can start a GmbH with an UG as holding instead. This will take a month and requires you to sign over at least 12500€ of assets to the GmbH.

Now, what if you want all of that, but you also want a shell corporation to hide the owners and investors? Then you'd start a GmbH & Co KG, where you set up a limited liability corporation, a shell corporation with multiple special classes of stock, and potentially additional holdings. This is what OP went with.

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#459

Post by notanormalnerd »

FLHerne wrote: post #51

> Which leaves the only real question. Why 25,000 at all? It is my company and my risk. If I want to start with nothing, that is my call, not a toll the state collects before it will let me try. > And the cheap door has a price of its own: to some clients, “UG” reads as “not serious,” and they would rather deal with a GmbH The post itself explains exactly why the first complaint is a fallacy and the second one is tru…

Yeah, he has no clue and complains about having no clue.

He wants a company but not put down any assets, but still limited liability, he has to get a UG. But obviously customers don't want to deal with that because there are no assets in case they pay 5.000€ and the company goes belly up.

Customers deal with GmbH, because they know they have at least a little bit of value in assets. So if I buy from you for 5.000€ I know that should be covered by your assets.

The guy is an idiot and has been misconsulted by the law firm and has been pulled over the table by said law firm.

Re: Founding a company in Germany: €9600, 152 days and I still can't send an invoice

#460

Post by kuschku »

valzam wrote: post #115
Aurornis wrote: post #80

Earlier quoted context omitted.

If the parent comment is correct and this form is necessary for personal financial protection, I wouldn’t consider that “all out”. That’s the bare minimum consideration for a viable company structure.

OP wanted to set up a nested copmany structure. Instead of Person -> LLC it goes Person -> Limited Partnership --> LLC. The in between company is only for tax-efficiency and has nothing to do with limited liability.

Even then you'd usually go with a Person -> Holding UG -> Startup UG structure. That's a few hours and less than a thousand Euros.
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