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That does not explain the reason for making things complicated. British limited companies are extremely simple and cheap: Minimal capital requirements (£1), pr

That does not explain the reason for making things complicated. British limited companies are extremely simple and cheap: Minimal capital requirements (£1), protection, and minimal red tape and fees (as said, minutes to create one online and £20). I fail to find a valid reason to have it differently.

detaro 8y ago
The assumption that limited companies without requirements make it to easy to abuse that protection (decreasing trust in companies with that status), and that thus there's value in signaling through the company status that it has at least something backing it up. Clearly only having GmbHs didn't meet demand, since quite a few people went for british Ltds despite them having a bad reputation, so a native replacement for those was created.
- ElBarto 8y ago
  In the real world nothing guarantees that a company is solvent. > went for british Ltds despite them having a bad reputation Cheap shot there. They don't have a bad reputation, assuming that claiming that companies from one of the main economies in the world have "bad reputation" makes any sense at all. The reason people go for them is that most other European countries make it onerous to setup a company, while the UK does not see any reason to make it difficult. Requiring €25k shuts the door to many people who would like to setup their own small business, for example.
  - detaro 8y ago
    It's not a cheap shot, it was reality, especially in B2B contexts, that if your new, clearly German, company was a foreign limited instead one of the native ones that was seen as problematic by some customers (obviously depending on the field etc. too) And again, the rates of German Ltds. have gone down massively with the creation of the UG, so clearly that policy correction is working and not seen as overly onerous. (although lots of small companies also operate as unlimited companies)
    - ElBarto 8y ago
      > And again, the rates of German Ltds. have gone down massively with the creation of the UG, so clearly it's working and not seen as overly onerous. My point is that UG create another layer instead of simplifying GmbH, which they refuse to do. From what you said UG still force you into GmbH: "25% of net income have to be added to the company investment, until the 25k€ threshold is reached". That's still quite onerous. I think this is cultural. In the Anglo-sphere, the culture is much more one of laisser-faire. Other culture are much more fearful of any financial risk. At the end of the day, though, on this I think the UK has it right: Make it as easy as possible for people to start a business. There is no downside.

detaro 8y ago

The assumption that limited companies without requirements make it to easy to abuse that protection (decreasing trust in companies with that status), and that thus there's value in signaling through the company status that it has at least something backing it up. Clearly only having GmbHs didn't meet demand, since quite a few people went for british Ltds despite them having a bad reputation, so a native replacement for those was created.

ElBarto 8y ago
In the real world nothing guarantees that a company is solvent. > went for british Ltds despite them having a bad reputation Cheap shot there. They don't have a bad reputation, assuming that claiming that companies from one of the main economies in the world have "bad reputation" makes any sense at all. The reason people go for them is that most other European countries make it onerous to setup a company, while the UK does not see any reason to make it difficult. Requiring €25k shuts the door to many people who would like to setup their own small business, for example.
- detaro 8y ago
  It's not a cheap shot, it was reality, especially in B2B contexts, that if your new, clearly German, company was a foreign limited instead one of the native ones that was seen as problematic by some customers (obviously depending on the field etc. too) And again, the rates of German Ltds. have gone down massively with the creation of the UG, so clearly that policy correction is working and not seen as overly onerous. (although lots of small companies also operate as unlimited companies)
  - ElBarto 8y ago
    > And again, the rates of German Ltds. have gone down massively with the creation of the UG, so clearly it's working and not seen as overly onerous. My point is that UG create another layer instead of simplifying GmbH, which they refuse to do. From what you said UG still force you into GmbH: "25% of net income have to be added to the company investment, until the 25k€ threshold is reached". That's still quite onerous. I think this is cultural. In the Anglo-sphere, the culture is much more one of laisser-faire. Other culture are much more fearful of any financial risk. At the end of the day, though, on this I think the UK has it right: Make it as easy as possible for people to start a business. There is no downside.