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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

#441

Post by phlo »

fakedang wrote: post #249
phlo wrote: post #198

You have to savour the lack of self-awareness in this one. > Founder chooses the most complex legal structure that's readily-available... and is surprised that this complexity comes with laywer and notary fees. > Founder decides to incorporate a company with the name of a popular brand of kitchen rolls... and is surprised that it's too generic. > After "weeks of correspondence" (and, I suppose, extensive research), f…

Is the GmbH the most complex legal structure? What about the AG?

The author went with an UG nested in a KG as the legal structure. That's two legal entities. It's a neat workaround to avoid corporate taxes (the KG acts as a pass-through vehicle, for taxes and for liability), and avoid personal liability (which passes through the KG but stops at the UG).

In comparison, AG and GmbH also shield their owners from liability, but require capital deposits and are subject to corporate taxes.

Going with a UG-in-a-KG is an exercise in eating your cake and having it too. It's a cool legal structure that works around some of the limitations of its building blocks. It shouldn't come as a surprise that the people who can build the neat hack for you are going to want to get paid in order to do that.

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

#442

Post by lucamark »

gregorygoc wrote: post #220
lucamark wrote: post #144

Europe will suffocate under the weight of its own bureaucracy. The sad thing is that it is not new to me, I've heard so many stories like this one. This is the kind of friction that makes founders incorporate elsewhere. Also, a founder spending months coordinating lawyers banks and tax advisors is not talking to customers or building the product. The opportunity cost here is huge. Anyway, you are pretty close. One mo…

Ah yes, Germany == Europe.

Do you think that stuffs are different in Italy, Spain or France? Just to cite some others

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

#443

Post by sarjann »

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…

Isn't that what insurance is for? So you don't need to stash away a bunch of idle capital incase something goes wrong.

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

#444

Post by moooo99 »

WarmWash wrote: post #254
moooo99 wrote: post #222

Earlier quoted context omitted.

> I have yet to find the mythical efficiency everyone was talking about. Comes down to a misrepresentation of history. Germans were never known to be efficient, they were known to be precise with everything, including bureaucracy. This happens to be handy with machinery, but not much else.

...but their machinery (or cars and motorcycles at least) are needlessly complex and unbelievably frustrating to work on. Really I think that they just landed on some really successful marketing.

> Really I think that they just landed on some really successful marketing.

It depends. For some machinery the complexity is inherent, this makes German machines very good at what they do. But this approach does not tend to scale well, which is part of the reason the German economy tends to be fairly specialized with „hidden champion“ SMEs.

Made in Germany has (had?) a very positive connotation to it, but for historic reasons.

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

#445

Post by moooo99 »

quadrifoliate wrote: post #365
weinzierl wrote: post #126

Not to defend German bureaucracy but if you are serious and want results this is not how you do it. If you want a GmbH quickly there are specialized lawyers that maintain a pool of freshly founded GmbH's for you to buy. Everything is set up for you to start. If you don't like certain things like the company name, you can always change it later. That being said, I know plenty of people who founded their GmbH themselve…

> If you want a GmbH quickly there are specialized lawyers that maintain a pool of freshly founded GmbH's for you to buy. The fact that this absurd situation exists is a huge proof that the bureaucracy has gotten out of hand and that Germany is unfriendly to starting new businesses.

> The fact that this absurd situation exists is a huge proof that the bureaucracy has gotten out of hand and that Germany is unfriendly to starting new businesses.

While this is somewhat true, this is not an indication. You can start a business tomorrow for a fee of 30€. Even a normal UG is somewhat quick to set up and less expensive. Just because you insist on some non standardized company setup is not a good indication for an economy

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

#446

Post by lucamark »

tikotus wrote: post #199
lucamark wrote: post #144

Europe will suffocate under the weight of its own bureaucracy. The sad thing is that it is not new to me, I've heard so many stories like this one. This is the kind of friction that makes founders incorporate elsewhere. Also, a founder spending months coordinating lawyers banks and tax advisors is not talking to customers or building the product. The opportunity cost here is huge. Anyway, you are pretty close. One mo…

Germany is not EU though. Very different bureaucracy in different EU countries. Up to a point, EU doesn't add a single bit of bureaucracy to the stack. Only once you reach a certain limit you will have to enroll in an international VAT system, which is not too bad. EDIT: Just re-read your message. I thought it said EU. But the point stands, Germany is not Europe either.

In many other european countries, the story doesn't change much - with some exceptions. The irony is that the EU is now discussing EU Inc. a law to let startups incorporate online within 48 hours, for at most €100, under a single optional corporate framework across Europe.

That is exactly the right direction. But for now it is just a proposal

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

#447

Post by danmaz74 »

_fat_santa wrote: post #276
WarmWash wrote: post #224

Earlier quoted context omitted.

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.

The US system is built to support entrepreneurship while the EU system broadly is to support the consumer and employee. The US will never be able to match the EU's consumer and employee protections and the EU will never be able to match the US's ease of doing business, because to have one you have to fundamentally give in on the other. Depending on who you ask, one system is wildly better than the other, but at the e…

Even when the UK was in the EU, you could create a limited liability company (LTD) for something like 200 pounds or less, no capital needed. So it's not true at all that setting up a business at a low cost is somehow against EU legislation.

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

#448

Post by moooo99 »

Aurornis wrote: post #69
stop50 wrote: post #2

For information: GmbH & Co. KG is one of the most complicated forms an company can be founded, the same goes if the inner company is an UG. Many things have to be done twice. The only good thing is that an investor or an owner are not liable with their private money.

> The only good thing is that an investor or an owner are not liable with their private money. That’s incredibly important. More than a footnote. I would consider any other form to be non-viable if it doesn’t have such protections. For comparison, starting an LLC in the United States is a trivial operation. I can’t even remember how long it took me to set mine up because it was a trivial event. Maybe a couple hours,…

> That’s incredibly important. More than a footnote. I would consider any other form to be non-viable if it doesn’t have such protections

That applies to a normal GmbH as well, so does it to an UG. UG & Co. KG is sometimes done for tax reasons, but not liability

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

#449

Post by hdgvhicv »

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.

Same in the uk, well it’s “same day” costing about $200. The normal approach is 24 hours and costs about $130

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

#450

Post by ruicraveiro »

doikor wrote: post #318
WarmWash wrote: post #224

Earlier quoted context omitted.

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.

A lot of places in Europe are around the same. In Finland forming a non listed stock company is 240€ in fees without any requirement for capital/assets. I think Estonia is even cheaper.

Here in Portugal the legal requirement is 1€ for an LLC (lda) and it took me a few hundred euros in fees only, all in morning to take care of everything.
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