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The Legal Process of Setting Up a Company
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Information about the legal requirements involved when starting a business in Germany...
In order to start a business in Germany, it is necessary to:
- Organise two sets of tax registration:
- for commercial tax at the Gewerbesteueram
- for the local tax office at the Finanzamt
- Hire a notary and register the business at the local court (Amtsgericht)
The most important decision in starting a business is the form the business will take. The entrepreneur has a choice between sole proprietorships, non-incorporated and incorporated firms.
One-person businesses
If the business is to be formed by one person alone, the following options are available:
- Sole proprietorship
- One-man GmbH
When a trade is registered with the Trade Office and the company is managed by a single person, a sole proprietorship is automatically created. This also applies to freelancers if they apply for a tax number at the local tax office.
When conducting a trade (as opposed to a freelancer), it is necessary to register the company in the commercial register as a "business established as a commercial operation".
A one-man GmbH must be entered in the commercial register by a public notary. Although there are exceptions to the rule, a GmbH may only be founded by those conducting a trade and not by freelancers.
- For more information, contact the appropriate Chamber of Commerce
Partnerships
If the company is to be set up with partners, the following options are available:
- Non-incorporated firms
- Incorporated firms
Both types must be entered in the commercial registry and registered by a public notary.
Documents required
For setting up a company in Germany, the following is required:
By an individual:
- Proof of German settlement permit (Niederlassungserlaubnis), if required
- Passport
- Nominal capital for a GmbH (€25,000 plus fees)
By a legal entity:
- Certified translation of the parent company's registration
- The nominal capital for a GmbH (€25,000 plus fees)