How to Incorporate a Company. What You Need to Know
Are you thinking about establishing a business in the UK? Where do you start? This note will give you a brief understanding of the Companies Act 2006 and what you need to know in order to set up a business in the UK. The Companies Act 2006 provides for three types of companies to be established:
Company limited by shares;
Company limited by guarantee; and
The most common form is the company limited by shares, which will be discussed here. Continue reading →
Under German law (see section 14 Gewerbeordnung, i.e. German Trade Regulation), the commencement of a business activity must be notified in writing (Gewerbeanmeldung) to the local Ordnungsamt (Trades Office), which is a department of the municipal government, for example the city of Munich. This notification obligation also applies to any change in the business (e.g. move, modification to the nature of the business or staff recruitment) and to the termination of the trade activity, which requires a termination notification (Gewerbeabmeldung). More information on the various options in terms of how to start a business in Germany is available here. For an overview of German company forms see here. Continue reading →
Every German company, partnership and association must be officially registered in the Handelsregister (Commercial Register). In contrast to England, where this information is collected centrally by Companies House, Germany uses a decentralised system.The “original” records of a company are kept at the respective local District Court (Amtsgericht) where the company has its official seat. This legal seat does not necessarily need to be the actual place of business. Continue reading →
German labour law is strictly regulated and employees are well protected against dismissal if the employer’s workforce exceeeds 10 full time employees (details here). Furthermore, German wage tax (Lohnsteuer), health insurance, social security and state pension contributions are rather hefty (for more see here: Statutory Pension Insurance in Germany). Therefore, to try to avoid these labour costs, some employers but also employees are tempted to make it look as if the employee was a freelancer. They enter into a “consulting” or “freelance” agreement. But in reality the employer still expects the so called “freelancer” to be there at certain hours and the “freelancer” does not have any other clients. This is extremely risky: Continue reading →
In this issue of „London Business Matters“, the London Chamber of Commerce’s monthly magazine, German corporate and business lawyer Bernhard Schmeilzl has compiled “10 Top Tips when starting a Business in Germany”. The magazine also contains helpful information about the trading relations between the UK and Germany. Just browse the online issue. For more details on how to establish a business in Germany please see the articles below
Establish a real German Company, register a Branch Office or start with a mere Representative Office
If you want to sell your goods or services to Germans it is in most cases a huge advantage to be actually present in Germany. A German business address and phone number shows that you are seriously committed to doing business in Germany long term and thus builds trust with customers and business partners. But how to go about it technically? Continue reading →
Every day, we get enquiries by foreign entrepreneurs who want to establish a German business entity. The most commonly used form is the German limited liability company (Gesellschaft mit beschränkter Haftung, in brief GmbH), which will in most cases be the natural choice for serious business projects. However, some clients have heard or googled that there is the possibility to start with a so called “Unternehmergesellschaft haftungsbeschränkt” (“UG”), which is commonly referred to in Germany as “Mini-GmbH”. This is still relatively new to German corporate law. It was introduced in 2008 by German legislation as a reaction to the fact that more and more foreign company forms (UK Limited, Dutch BV etc.) were used to establish German based new businesses. The idea was to create an option for German entrepreneurs to establish a limited liability company without having to use foreign company forms. So far so good. So this option does now exist since 2008.
Do we recommend to use it? The clear answer is no!
We usually strongly discourage our clients from establishing a Mini-GmbH, because in German business life such a Mini-GmbH is simply not being taken seriously. Every business partner, bank and client will immediately assume that the company (and its shareholder) does not have any money. The traditional concept of the German GmbH is that the shareholder must at least come up with 12,500 Euros minimum cash share capital. This is meant as a “test of seriousness”. German law wants to achieve that the company form GmbH is only being used by shareholders that do have and are willing to use enough funding to start a business without being out of cash from day one. Continue reading →
If you wish to establish a German Limited Company (Gesellschaft mit beschränkter Haftung, in short: GmbH) from abroad, you will probably not get very far without the assistance of experienced professional service providers. For more than 10 years the German law firm Graf & Partners advises and assists foreign shareholders and company directors on how to: Continue reading →
Whether you establish a new company in Germany (details here) or set up a branch of your already existing UK company over here, sooner or later you will probably need a business bank account at a German bank, even if just for the fact that customers, suppliers and other business partners expect you to have one, not to mention German tax authorities. So, how to go about it?