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"Found a small company (UG) with 500EUR capital to hold rights on the site if you want to further professionalize this project." Can you elaborate a bit? I hav

"Found a small company (UG) with 500EUR capital to hold rights on the site if you want to further professionalize this project." Can you elaborate a bit? I have the same problem as the original poster. But founding a company requires IHK membership fees and tax consultant fees. From what I hear this amounts to ~ 1500 €/year.

jakobegger 10y ago
I'd recommend against that. You'll probably be fine as a sole proprietor (Einzelunternehmen). A separate legal entity (UG / GmbH / Limited / whatever) is mainly useful for three things: - avoiding personal liability - shared ownership - tax optimisation For a website like this, there is practically no liability to worry about. And if you don't have a partner, you don't need to worry about shared ownership. For tax purposes, the overhead of a legal entity only pays off if you already have a lot of revenue (in Austria, more than 200k€ per year)
- cruppstahl 10y ago
  Agree for a website. I'm selling software licenses, avoiding personal liability would be interesting (if it was affordable).
  - jakobegger 10y ago
    "Limited liability" is mainly related to financial liability (taxes, wages, payments for supplies). If you are worried about your software accidentally deleting all your users files, getting insurance would probably be better than founding a GmbH (and more affordable too).
    - cruppstahl 10y ago
      Interesting - thanks for your answers!
- WA 10y ago
  I second that. There is no need to start a UG or GmbH. Especially not for avoiding personal liability! Because as the director of the company (which you are as a solo founder), you ARE still personally liable (GmbH-Geschäftsführer-Haftung). Get a Gewerbeschein. It's 25€ or so. IHK might want membership fees, but they are really low if you don't have much income. Go with Kleinunternehmerregelung. It makes many things easier if your revenue is below 17,500€ per year. Don't forget: The first 8,000€ in income per year are tax-free.
  - cruppstahl 10y ago
    Thanks for the insights!
bflesch 10y ago
If you create a legal entitiy you will have to pay taxes / IHK (depending on your annual profit) and some tax consultant fees. But in my eyes the benefit overweights: - all your business expenses are kept in a professional setting and don't screw with your personal finances - you will have a separate bank account - you have a legal entity you can later sell to a real business - you can use leftover money to (re-)invest into nearby business areas - you have limited liability (and you can buy proper insurances for your risky business activities!!) Your local IHK will be happy to guide you through this process. I also started off as a sole proprietor and moved up the food chain through UG to GmbH(s), and there is so much you will learn during this process. I think every entrepreneur should have experience with local trade laws and taxes, so in my eyes you can't start early enough. If you have any questions feel free to ping me.
- onli 10y ago
  I was thinking in the direction of a limited in the UK, having read that this is the easiest way. Do you have an opinion on that? I'm a german living in France, the tax situation is already difficult enough, but yeah – I also think it is a good idea to separate any project income and costs from my personal finances
  - bflesch 10y ago
    I strongly advise you against forming a limited in the UK. The setup cost might be low but if something unusual happens the fees for expert advice will eat you alive. Furthermore UK Ltd has a very bad reputation in mainland EU because they are used by many people who aren't allowed to form companies in they home countries (e.g. Germany) any more due to previous bancruptcies. If you do it out of tax reasons and you are willing to take the risk of not being able to do any administrative "things" by going to a local government agency in the town where you live, then form an entity outside of EU for example in singapore. Again, I'd suggest you start your first steps in business locally where you can talk to actual people. There are a lot of services available that can help you out in person.
    - onli 10y ago
pjlegato 10y ago
You can form a US corporation for approximately 100-200 per year in most states (California being a notable much more expensive exception.) There is no requirement that you actually live in the US or even visit. Stripe now has "US incorporation as a service": https://stripe.com/atlas https://stripe.com/atlas

jakobegger 10y ago

I'd recommend against that. You'll probably be fine as a sole proprietor (Einzelunternehmen). A separate legal entity (UG / GmbH / Limited / whatever) is mainly useful for three things: - avoiding personal liability - shared ownership - tax optimisation For a website like this, there is practically no liability to worry about. And if you don't have a partner, you don't need to worry about shared ownership. For tax purposes, the overhead of a legal entity only pays off if you already have a lot of revenue (in Austria, more than 200k€ per year)

cruppstahl 10y ago
Agree for a website. I'm selling software licenses, avoiding personal liability would be interesting (if it was affordable).
- jakobegger 10y ago
  "Limited liability" is mainly related to financial liability (taxes, wages, payments for supplies). If you are worried about your software accidentally deleting all your users files, getting insurance would probably be better than founding a GmbH (and more affordable too).
  - cruppstahl 10y ago
    Interesting - thanks for your answers!
WA 10y ago
I second that. There is no need to start a UG or GmbH. Especially not for avoiding personal liability! Because as the director of the company (which you are as a solo founder), you ARE still personally liable (GmbH-Geschäftsführer-Haftung). Get a Gewerbeschein. It's 25€ or so. IHK might want membership fees, but they are really low if you don't have much income. Go with Kleinunternehmerregelung. It makes many things easier if your revenue is below 17,500€ per year. Don't forget: The first 8,000€ in income per year are tax-free.
- cruppstahl 10y ago
  Thanks for the insights!

bflesch 10y ago

If you create a legal entitiy you will have to pay taxes / IHK (depending on your annual profit) and some tax consultant fees. But in my eyes the benefit overweights: - all your business expenses are kept in a professional setting and don't screw with your personal finances - you will have a separate bank account - you have a legal entity you can later sell to a real business - you can use leftover money to (re-)invest into nearby business areas - you have limited liability (and you can buy proper insurances for your risky business activities!!) Your local IHK will be happy to guide you through this process. I also started off as a sole proprietor and moved up the food chain through UG to GmbH(s), and there is so much you will learn during this process. I think every entrepreneur should have experience with local trade laws and taxes, so in my eyes you can't start early enough. If you have any questions feel free to ping me.

onli 10y ago
I was thinking in the direction of a limited in the UK, having read that this is the easiest way. Do you have an opinion on that? I'm a german living in France, the tax situation is already difficult enough, but yeah – I also think it is a good idea to separate any project income and costs from my personal finances
- bflesch 10y ago
  I strongly advise you against forming a limited in the UK. The setup cost might be low but if something unusual happens the fees for expert advice will eat you alive. Furthermore UK Ltd has a very bad reputation in mainland EU because they are used by many people who aren't allowed to form companies in they home countries (e.g. Germany) any more due to previous bancruptcies. If you do it out of tax reasons and you are willing to take the risk of not being able to do any administrative "things" by going to a local government agency in the town where you live, then form an entity outside of EU for example in singapore. Again, I'd suggest you start your first steps in business locally where you can talk to actual people. There are a lot of services available that can help you out in person.
  - onli 10y ago

pjlegato 10y ago

You can form a US corporation for approximately 100-200 per year in most states (California being a notable much more expensive exception.) There is no requirement that you actually live in the US or even visit. Stripe now has "US incorporation as a service": https://stripe.com/atlas https://stripe.com/atlas