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 →
Becoming an employer in Germany can be a bit of a culture shock for foreign entrepreneurs, especially those coming from a more hire and fire oriented US jurisdiction. German labour law is highly regulated. We explained the rules regarding employee protection against dismissal here and described the risky issue of “Fictitious Self-Employment” here. Another fact, that many American or Asian employers can’t get their head around is the amount of holidays German employees are entitled to. Here are the basics of statutory vacation entitlement in Germany: 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 →
A British employee who is sent to Germany by his/her firm or an entrepreneur planning to provide services as a freelancer within Germany sooner or later are faced with a number of quite complicated issues regarding taxation, social security contributions and pension rights. In many cases the individual advice of a counselor should be sought. The following links will help to create a basic understanding of the matter:
To start or expand a business in Germany an existing enterprise can: (i) either trade directly from the UK; (ii) use a German partner as agent or distributor; (iii) set up a branch office in Germany or (iv) establish a separate legal entity for the German activities, which makes good sense when one wants to separate the risks of the specific German business. The best choice for option (iv) will in most cases be a German GmbH, the equivalent to a Private Limited Company, because such GmbH will have better standing with banks, suppliers and customers than a foreign company form. More information on the nature of a GmbH and the formation procedure here.
Many small or mid sized businesses do not want to hire a large number of employees (especially with the very strict German employee protection laws) or create much overhead costs until they know that the business will actually gain a foothold in the German market. Still, it has many advantages to be actually present with a German company on German territory, i.e. have a German business address and German speaking contact persons, since this creates trust with (potential) clients and business partners. Continue reading →
The most popular company form in Germany is the “Gesellschaft mit beschränkter Haftung” which translates “company with limited liability”. We explain the formation process here (see PDF guideline) and provide a sample set of documents (articles of association, statutes etc.) here.
However, before you can fully concentrate on your business there are still some more issues to be taken care of. In addition to the basic registration duties, which are explained on the website if the Central Tax Office, here is a short checklist of what you should not forget when starting a company in Germany: Continue reading →