There's indeed a considerable level of risk but it's often also grossly overstated. There are plenty of partnerships and sole proprietorships and there have bee

There's indeed a considerable level of risk but it's often also grossly overstated. There are plenty of partnerships and sole proprietorships and there have been for years. They're doing just fine. I agree the system is far from perfect but in my experience the people who commonly complain about the risk of setting up a partnership on one hand or the high cost and the bureaucracy that comes with incorporating in Germany on the other hand often don't really want to found a company in the first place but rather find a convenient reason not to. After all, it's a matter of risk assessment. If your proposed business is inherently risky, you have to hire right from the start or you're looking for equity financing then by all means do incorporate. Doing so is a one-time effort (or rather a once-per-year effort when including the additional requirements for annual accounts). In a company's lifetime that effort really doesn't matter all that much.