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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

#601

Post by markvdb »

notpushkin wrote: post #568
markvdb wrote: post #484

Earlier quoted context omitted.

Substance in Estonia is usually required. A rented address does not suffice for that.

Could you elaborate, please? I’ve thought the whole point of e.g. the e-Residency program was to bring in business that’s not substantially tied to Estonia.

Substance would be real activity happening in Estonia: - Where are the decisions made? - Where is the work being done?

Why would I otherwise pay 66% in taxes in Belgium when I could just set up an Estonian ltd, get limited liability and pay 0 until I take anything out?

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

#602

Post by sarchertech »

WarmWash wrote: post #224
Lariscus wrote: post #194

Earlier quoted context omitted.

The authors inability to understand this really makes wonder how much of the rest of their story is essentially self-inflicted.

They are jealous of the US system where you can create an LLC in one hour for $200, and by the next day be doing business with all your personal assets isolated.

Single member LLCs provide much less protection than most people imagine.

1. Any debt the business needs will require your personal guarantee. Even something as simple as getting a business cellphone.

2. They don’t protect you from liability for your own negligence. If you’re a very small company with no employees, almost everything someone would sue you for (for which you aren’t already personal guarantor) will arguably be down to personal negligence on your part.

It’s different if you have employees or other members because an LLC protects your personal assets against liability caused by their negligence.

But I constantly hear the advice that people operating as freelance devs should start an LLC as the very first thing they do and that’s silly in most cases.

What most people who start a single member LLC are really looking for is liability insurance.

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

#603

Post by hapless »

nradov wrote: post #225
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…

There is no need for a company to be able to cover liabilities. It's a stupid rule.

It's an important rule if you want the liability protections associated with a limited liability corporation

If you just want to start a business, without any associated shell companies or liability transfers, it costs $0 and requires filing one sheet of paper. It is very easy!

https://www.formulare-bfinv.de/ffw/form/display.do?%24contex...

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

#604

Post by t0mas88 »

davedx wrote: post #414
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 /…

> The standard way to reduce liability risk is to get liability insurance Exactly! That's what I do in the Netherlands. It's also common to cover this contractually too - you can negotiate where liability falls for many cases. Getting a limited liability company for a one-person operation is just overkill.

The Netherlands changed the rules 14 years ago to allow a BV (equivalent to a German GmbH or US LLC) with zero starting capital. If suppliers want to check company capital, the data is public with the companies register (KvK for locals).

There are two reasons not to go this way in NL, 1. There are tax discounts for small businesses that only apply to a sole proprietorship kind of structure and 2. Administrative costs for a BV are slightly higher because the legal entity itself needs to file taxes, instead of only the owners having to do so.

But the difference is now very small, #1 has been reduced the past few years and #2 is quite simple. It's an online portal to submit the numbers, if you know what you're doing you don't need an accountant.

And I think this is the key criticism for the German system. They don't seem to have a simple online portal for this and they still require 25k starting capital. That makes it harder for a small business to get started.

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

#605

Post by nradov »

zymhan wrote: post #469
nradov wrote: post #231

Earlier quoted context omitted.

If a company collapses while having more liabilities than assets then that's fine. No one is being forced to extend any credit to them.

It will make it harder for "worthy" companies to get loans and credit.

Nah. Lenders are free to do whatever credit checks they like. Government doesn't need to get involved.

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

#606

Post by sarchertech »

ApolloFortyNine wrote: post #590
Zak wrote: post #538

Earlier quoted context omitted.

The ability to build reliable software has existed for a long time. Commercial airlines make heavy use of it, and serious failures are vanishingly rare. The problem is building software to those standards of reliability is expensive and slow. Consumer software never justifies it. Business software rarely does. If you want me to accept liability for the consequences of bugs in code I write, I'm giving you a schedule f…

>Commercial airlines make heavy use of it, and serious failures are vanishingly rare. Is this a joke? There's a major outage effecting flights at least yearly. The Delta one is from May... [1] https://en.wikipedia.org/wiki/2022_Southwest_Airlines_schedu... [2] https://www.usatoday.com/story/travel/airline-news/2026/05/0...

The OP is talking about the software onboard airplanes, not the operational software used by airlines.

They should have said aircraft manufacturers, not airlines, but it’s clear what they meant.

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

#607

Post by glad_duck »

WinstonSmith84 wrote: post #522
ghaff wrote: post #340

Earlier quoted context omitted.

I set up an LLC in the US for about $500 and pay Delaware a few hundred each year in fees. As it turned out, it was probably an unnecessary exercise and I probably won't renew in a couple years. But it wasn't a big deal.

Delaware is expensive and you must have had a very specific reason to build your LLC there, rather than for example in Wyoming - such that to raise capital, build a corporation, etc. Now if you want to shut it down in a couple of years, it's not exactly clear what you had in mind.

If you register your company in WY but will be doing business in e.g. MA, you will have to pay registration fee in both jurisdictions. Doesn't sound like a saving to me.

If you mean why not register in your state, then Delaware has some tax benefits I believe. Not sure they will apply in MA though, maybe somewhere else?

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

#608

Post by graemep »

Zak wrote: post #335
rayiner wrote: post #308

Earlier quoted context omitted.

Not quite. In the US this condition is handled at the back end. Running a corporation or LLC without sufficient capitalization can be grounds for piercing the liability shield in a lawsuit.

I have the impression the situations where that actually happens are at least arguably serious misconduct, and usually targeted at someone with significant assets. A construction company that pockets ten million dollars and doesn't build anything probably can't shield its owner this way, but a single-developer software consultancy that pockets ten thousand dollars and delivers buggy code can.

Much the same in the UK. Usually some kind of fraud or failing to stop trading when it was obvious insolvency was unavoidable. No minimum capital requirements either.

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

#609

Post by fmobus »

asyx wrote: post #528
nonethewiser wrote: post #457

Earlier quoted context omitted.

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

Like he said the GmbH is just the wrong legal form of his company. You can register a Kleingewerbe online over night and an UG within 2 weeks and that waiting period is only 2 weeks because it's such a simple and cheap process that notaries won't make time for you and they are busy people so you just take the next free slot they have in their calendar. So if you are lucky you can get an appointment the next day. My w…

Cool story bro. But this shouldn't require a notary.

A sane country would handle this with a handful standardized forms of incorporation with clear rules, so that the majority of use cases that a normie might need is covered. All of this should be a few clicks on a gov webpage at most. Maybe some fee/deposit/whatever.

Lawyers and notaries should only start showing up when people want complicated setups.

(Yes I'm bitter with German notaries because so far they only took my money for some very mid service and couldn't even take two seconds of their time to answer an email with normal German words or clear instructions.)

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

#610

Post by nradov »

hapless wrote: post #603
nradov wrote: post #225

Earlier quoted context omitted.

There is no need for a company to be able to cover liabilities. It's a stupid rule.

It's an important rule if you want the liability protections associated with a limited liability corporation If you just want to start a business, without any associated shell companies or liability transfers, it costs $0 and requires filing one sheet of paper. It is very easy! https://www.formulare-bfinv.de/ffw/form/display.do?%24contex...

You're missing the point. There shouldn't be any capital requirement just to get liability protections. No one is forcing counterparties to accept liabilities.
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