4 ms·

> I have been thinking about going self-employed as a sidejob, boost my student-income a bit. This costs you 10 minutes and 25 bucks (Gewerbeschein). Then you

by WA 10y ago

> I have been thinking about going self-employed as a sidejob, boost my student-income a bit. This costs you 10 minutes and 25 bucks (Gewerbeschein). Then you can file taxes for your side income once per year, which takes another 30 minutes, because at the side-income level the calculation is: income - expenses.

mschuster91 10y ago
With just a Gewerbeschein for a single person company you're personally liable for all debts/obligations! Been there, done that and nearly went to jail. Never again.
- BjoernKW 10y ago
  Same applies to the managing director of a GmbH (Germany-style Ltd.), even more so because with a GmbH you can actually be held criminally liable if your company goes bankrupt.
  - signal11 10y ago
    Wow. I remember reading somewhere that an early American innovation (1833 in Federal law) was - no more debtor's prisons, which allowed much more risk-taking in American business. I did not realize this persists today in Germany. https://en.wikipedia.org/wiki/Debtors%27_prison https://en.wikipedia.org/wiki/Debtors%27_prison (Note that the US is often criticized for court fines which result in jail time if you're unable to pay, but that's a much later meaning. Originally it meant jail if you were unable to pay someone back.)
    - BjoernKW 10y ago
      There's no debtors' prison in the sense that you have to go to prison if you can't pay your debts. The criminal offence is delayed filing of bankruptcy: If your company can't pay its bills, it can't make payroll or its liabilities exceed its assets you have to file for bankruptcy within 3 weeks. The problem with this is that often it isn't entirely clear if a company really is bankrupt by that definition. A company can be nominally bankrupt in one moment and solvent again in the next depending on how you look at it from a technical / accounting point of view. This again unfortunately sometimes is preyed upon by both liquidators, investors and creditors, who might try to sue the managing director in order to recoup their losses from the director's personal funds. A conviction for delayed filing of bankruptcy both applies additional pressure and makes a director personally liable, GmbH or not. So, in short: No there are no debtors' prisons anymore but the effect you described very much still applies thanks to outdated and misguided German bankruptcy laws.
  - literallycancer 10y ago
    I thought GmbH was the LLC equivalent?
    - BjoernKW 10y ago
      Yes, an LLC is the US equivalent. An Ltd. (private limited company) is its UK counterpart.
- germanier 10y ago
  Nobody will give a small limited liability company any serious credit line or similar. In practice you still are liable with your personal belongings to any relevant creditor if you are just starting. Also, if you think that there is no personal liability for the managing founder in a limited liability company, don't search for "Geschäftsführerhaftung" or you are going to have a bad day.
  - mschuster91 10y ago
    > Also, if you think that there is no personal liability for the managing founder in a limited liability company, don't search for "Geschäftsführerhaftung" or you are going to have a bad day. This is not a German exclusive. Managers of a company are nowhere shielded from legal responsibility when they violate the criminal code. (Okay, big banks maybe not, but at least from the letter of the law...)
    - germanier 10y ago
      I'm not well versed in other countries' laws but you are right of course. My comment was intended to be seen in this direction: For small companies (let's say up to a few employees) almost all relevant risks of liability for the founder exist equally in both unlimited and limited liability companies. There are very few cases were the shield of a limited liability company is beneficial. An insurance is ofter a cheaper way of getting that. Also, a significant customer with a competent lawyer will ensure that all contracts with a small just-started business will include a personal liability clause. That supermarket down the street? Almost surely run by a fully liable merchant. That consulting office next door? A fully liable partnership. This two-person software company? Both owner fully liable. It's a common choice and often better suited than it might sound at first.
- WA 10y ago
  My parent poster asked how to do things legally on the side while being a student. You don't get sued right away. Furthermore, it's better to control risk by getting the proper insurance for your business and NOT relying on "limited" liability of a GmbH (although I heard you have to do pretty dumb shit to really be held liable personally in a GmbH). So I'm really wondering what you did that you almost ended up in jail. This is certainly not the case for 99.9% of all people who just want to file taxes on their Adsense income once per year or code HTML for a bit of money.
Mo3 10y ago
This is a very stupid idea, especially in this field in this country.
- adwn 10y ago
  Care to elaborate?
  - Mo3 10y ago
    You are personally responsible and liable for anything that happens. I've nearly gone to jail over this and so has another member here.
    - adwn 10y ago
      > You are personally responsible and liable for anything that happens. So? You are personally responsible and liable for a nearly everything you do in life. Typically, you'll only "go to jail" if you do something seriously wrong, and then the limited liability of a GmbH won't save you (whether you're an owner or an employee). The limited liability of a GmbH refers mostly to financial liabilities in case of bankruptcy, not to, e.g., criminal negligence.

by WA 10y ago

mschuster91 10y ago

With just a Gewerbeschein for a single person company you're personally liable for all debts/obligations! Been there, done that and nearly went to jail. Never again.

BjoernKW 10y ago
Same applies to the managing director of a GmbH (Germany-style Ltd.), even more so because with a GmbH you can actually be held criminally liable if your company goes bankrupt.
- signal11 10y ago
  Wow. I remember reading somewhere that an early American innovation (1833 in Federal law) was - no more debtor's prisons, which allowed much more risk-taking in American business. I did not realize this persists today in Germany. https://en.wikipedia.org/wiki/Debtors%27_prison https://en.wikipedia.org/wiki/Debtors%27_prison (Note that the US is often criticized for court fines which result in jail time if you're unable to pay, but that's a much later meaning. Originally it meant jail if you were unable to pay someone back.)
  - BjoernKW 10y ago
    There's no debtors' prison in the sense that you have to go to prison if you can't pay your debts. The criminal offence is delayed filing of bankruptcy: If your company can't pay its bills, it can't make payroll or its liabilities exceed its assets you have to file for bankruptcy within 3 weeks. The problem with this is that often it isn't entirely clear if a company really is bankrupt by that definition. A company can be nominally bankrupt in one moment and solvent again in the next depending on how you look at it from a technical / accounting point of view. This again unfortunately sometimes is preyed upon by both liquidators, investors and creditors, who might try to sue the managing director in order to recoup their losses from the director's personal funds. A conviction for delayed filing of bankruptcy both applies additional pressure and makes a director personally liable, GmbH or not. So, in short: No there are no debtors' prisons anymore but the effect you described very much still applies thanks to outdated and misguided German bankruptcy laws.
- literallycancer 10y ago
  I thought GmbH was the LLC equivalent?
  - BjoernKW 10y ago
    Yes, an LLC is the US equivalent. An Ltd. (private limited company) is its UK counterpart.
germanier 10y ago
Nobody will give a small limited liability company any serious credit line or similar. In practice you still are liable with your personal belongings to any relevant creditor if you are just starting. Also, if you think that there is no personal liability for the managing founder in a limited liability company, don't search for "Geschäftsführerhaftung" or you are going to have a bad day.
- mschuster91 10y ago
  > Also, if you think that there is no personal liability for the managing founder in a limited liability company, don't search for "Geschäftsführerhaftung" or you are going to have a bad day. This is not a German exclusive. Managers of a company are nowhere shielded from legal responsibility when they violate the criminal code. (Okay, big banks maybe not, but at least from the letter of the law...)
  - germanier 10y ago
    I'm not well versed in other countries' laws but you are right of course. My comment was intended to be seen in this direction: For small companies (let's say up to a few employees) almost all relevant risks of liability for the founder exist equally in both unlimited and limited liability companies. There are very few cases were the shield of a limited liability company is beneficial. An insurance is ofter a cheaper way of getting that. Also, a significant customer with a competent lawyer will ensure that all contracts with a small just-started business will include a personal liability clause. That supermarket down the street? Almost surely run by a fully liable merchant. That consulting office next door? A fully liable partnership. This two-person software company? Both owner fully liable. It's a common choice and often better suited than it might sound at first.
WA 10y ago
My parent poster asked how to do things legally on the side while being a student. You don't get sued right away. Furthermore, it's better to control risk by getting the proper insurance for your business and NOT relying on "limited" liability of a GmbH (although I heard you have to do pretty dumb shit to really be held liable personally in a GmbH). So I'm really wondering what you did that you almost ended up in jail. This is certainly not the case for 99.9% of all people who just want to file taxes on their Adsense income once per year or code HTML for a bit of money.

Mo3 10y ago

This is a very stupid idea, especially in this field in this country.

adwn 10y ago
Care to elaborate?
- Mo3 10y ago
  You are personally responsible and liable for anything that happens. I've nearly gone to jail over this and so has another member here.
  - adwn 10y ago
    > You are personally responsible and liable for anything that happens. So? You are personally responsible and liable for a nearly everything you do in life. Typically, you'll only "go to jail" if you do something seriously wrong, and then the limited liability of a GmbH won't save you (whether you're an owner or an employee). The limited liability of a GmbH refers mostly to financial liabilities in case of bankruptcy, not to, e.g., criminal negligence.