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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

#481

Post by slopinthebag »

asyx wrote: post #471
Zak wrote: post #274

Earlier quoted context omitted.

> A company that starts with nothing wouldn't be a GmbH (limited liability company), it would be a GoH (company without liability), and there's a good reason why those don't exist... Those do exist in other countries. An LLC in the USA does not generally need to have a certain amount of assets. Such a company is more or less without liability until it has some assets; the worst case for its owners when it comes to a…

We have an UG for that. A GmbH is simply the wrong legal form for that sort of thing. You can create an UG with a single Euro on the bank account (and then immediately go bankrupt once you need to pay the notary).

OP’s point is that you don’t need money in the bank to open an LLC like you would in Germany.

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

#483

Post by miroljub »

asyx wrote: post #471
Zak wrote: post #274

Earlier quoted context omitted.

> A company that starts with nothing wouldn't be a GmbH (limited liability company), it would be a GoH (company without liability), and there's a good reason why those don't exist... Those do exist in other countries. An LLC in the USA does not generally need to have a certain amount of assets. Such a company is more or less without liability until it has some assets; the worst case for its owners when it comes to a…

We have an UG for that. A GmbH is simply the wrong legal form for that sort of thing. You can create an UG with a single Euro on the bank account (and then immediately go bankrupt once you need to pay the notary).

No we don't. UG is still a GmbH bureaucratic monster which a bit less start capital. You still need to follow all taxation rules like GmbH, which costs you few more thousands per year (Bilanzeirung, Steuerberater, Abschluss, ...) just to be legaly compliant.

American LLC taxation is as simple as or even simpler than Anlage EÜR. And you don't need a tax advisor to do it.

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

#484

Post by markvdb »

notpushkin wrote: post #264
metadat wrote: post #243

Earlier quoted context omitted.

Then it’s not an LLC, though. Personal assets exposed.

Up to 2500 €. You could put in 2500 € in capital – then your personal exposure will be zero. In practice, I don’t think it’s a meaningful difference, you will just have to keep the whole 2500 € on the company balance by the end of each FY. (Unless you wanna deal with non-monetary contributions!) If you put in 500 €, you’re liable for 2000 € personally, but you don’t have to keep them for your annual report. (It also…

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

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

#485

Post by Aachen »

account42 wrote: post #281

> “No,” said the lawyer. German company names have to be distinctive, and “Plenty” is a plain English word. Berlin would reject it. Good.

Say that to Tempo! It's like hoover or ipad, a word people use in place of the real product name, and no matter which brand the product is actually made by (a no-brand piece of paper is still referred to as Tempo)

It they're allowed to trade as Tempo in Germany, why isn't a company allowed to be called Plenty?

I agree it would be nicer if you couldn't hijack a normal word in the hopes it does well enough that people know of it and are constantly reminded of the brand, or that related searches have to consider putting this among the results, but in terms of a level playing field idk

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

#486

Post by florakel »

zipy124 wrote: post #187
florakel wrote: post #135

I don’t know the specifics but the OP chose a complicated setup. Why not just use a GmbH which is the equivalent to an Inc in the US? The capital requirement is 12500 in the bank not 25000 as stated. There are online services that run the whole process for you similar to Stripe Atlas. Even setting up a UG (with 1 euro stating capital) is very easy but you have to upgrade to a GmbH once you receive investment (investo…

They state that in the post, it is a tax-optimisation since it is a single-person company.

Maybe not a relevant experience then, as most people in this forum look for startup advice and take on external investment.

You can totally setup a Inc or LLC equivalent pretty fast in Germany as long as you stick to the standard. What he is setting up is basically an LLC owning an Inc.

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

#487

Post by notanormalnerd »

jeffreyrogers wrote: post #454

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 requi…

> The €25k working capital requirement seems a little prescriptive to me

It also hasn't been raised since 1981 when it was set at 50.000 DM. Which would provide a real trust to customers and suppliers working with a GmbH. This would mean 65.000€ accounting for inflation.

And trust is key in having a smooth running economy.

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

#488

Post by littlecranky67 »

mqus wrote: post #184
fredsters_s wrote: post #79

it is very funny that most of the (presumably germans) in the comments are saying "it's not that bad and it's fine because you chose a complicated LLC structure"

It's probably only funny because the commenting germans are aware that there is a much simpler "UG" (without the &co KG), which is pretty much a LLC, which you can open on your own, a bit faster, much cheaper. But apparently OP didn't do that for tax reasons (in a normal UG, if you want to pay yourself, you gotta pay income tax and all the other stuff) If an american comes and says they founded a public company (with…

UG is almost always a bad idea. Just go with the GmbH from the start. UGs need to convert to GmbHs over time anyway, it is just added bureaucracy. Your tax accountant alone will cost 3.500-5.000€ in the first year, so you need the money anyway. Starting a UG with 2.000€ in capital is stupid idea, you risk going bankrupt early on. Rembmer, delayed filing for insolvency (Insolvenzverschleppung) is a criminal ofense in Germany and you are risking that to.

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

#489

Post by chmod775 »

ffsm8 wrote: post #334
nish1500 wrote: post #319

Earlier quoted context omitted.

High initial capital requirements have repeatedly proven to be more detrimental than beneficial ( https://mariusring.github.io/web/BacherFagerengRingWold_Sele... ). Germany is an outlier in wanting to keep the barriers high. Running a business in Germany is for a closed inner circle. The apparatus is not meant for broke college students turning their weekend project into a company.

In Germany getting 25k as a working adult is hard, because before taxes and social security that's 50k you need to earn. Thats more then an average person earns in a year before taxes , so they'll likely be saving for 5-10 years if they want to start one. Now wherever that's an issue with the 25k admission fee OR with the fact that wages have stagnated for about 25 years in Germany, consequently mostly wiping out the…

> In Germany getting 25k as a working adult is hard

German median household wealth is 4x that.

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

#490

Post by lompad »

keiferski wrote: post #429
pwinnski wrote: post #425

Earlier quoted context omitted.

The word "most" is doing a lot here. Europe guarantees consumer rights by law, while the US relies on companies adopting the practices voluntarily. Most do, but larger companies more universally than smaller, and it's by no means universal.

It's the reality for the vast majority of larger companies. Quibbling with word choice is really not a good argument.

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