The Legal Process of Setting Up a Company

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)

• Set Up Requirements
• Legal Process
• Authorities Involved