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You can start out with an Einzelunternehmen (Sole Proprietorship) which means your personal finances and your "companies" finances are the same, but it's very l

by heipei 6y ago

You can start out with an Einzelunternehmen (Sole Proprietorship) which means your personal finances and your "companies" finances are the same, but it's very little hassle and cost to set up, basically an online form and a few Euro. Then, when you want to grow your business, limit your financial liability, take in outside money or just better control the flow of capital you can set up a GmbH (don't bother with an UG if you have the €25k at hand). Bonus points if you think it likely that you'll sell your business you can set up two GmbHs in a Holding structure which has big tax benefits in the event of a sale. You still only need the €25k once in that case.

rorykoehler 6y ago
Do not do an Einzelunternehmen to start. Do a UG. Not worth exposing yourself to the unforgiving and extremely aggressive Finanzamt when they decide they want to collect money you didn't expect to owe.
- j_autumn 6y ago
  Can you elaborate on that? My tax adviser told me I should go for a Einzelunternehmen (especially use the Kleingewerbe during the first year) because of the reduced costs (registration costs 25EUR and thats it) and not having the overhead. I’ve heard that registering a UG costs about ~500EUR + yearly costs of around 1500 EUR. Given that this is during a beginning to try things out - without having too much money laying around to play with it. Would definitely like to know about risks before getting myself into it.
  - rorykoehler 6y ago
    I know enough smart people who have been pursued by the Finanzamt because their accountant and the Finanzamt had a different interpretation of the law.
  - hobofan 6y ago
    > Given that this is during a beginning to try things out - without having too much money laying around to play with it. If that's what you want to do, then a Einzelunternehmen (without Handelsregistereintrag) should be fine and less beaurocratic overhead. Especially for bootstrapping or side-projects it's always useful to have a Gewerbe registered. As long as you follow the best practices (specifying 0€ expected income in the first year, etc.) and don't try to do any financial trickery, Finanzamt also shouldn't be a problem. However once you start to turn a decent profit (100+k/year) and/or start to hire people, you will be required to do more bookkeeping anyway, at which point it makes sense to found a GmbH (or even two layered ones).

by heipei 6y ago

rorykoehler 6y ago

Do not do an Einzelunternehmen to start. Do a UG. Not worth exposing yourself to the unforgiving and extremely aggressive Finanzamt when they decide they want to collect money you didn't expect to owe.

j_autumn 6y ago
Can you elaborate on that? My tax adviser told me I should go for a Einzelunternehmen (especially use the Kleingewerbe during the first year) because of the reduced costs (registration costs 25EUR and thats it) and not having the overhead. I’ve heard that registering a UG costs about ~500EUR + yearly costs of around 1500 EUR. Given that this is during a beginning to try things out - without having too much money laying around to play with it. Would definitely like to know about risks before getting myself into it.
- rorykoehler 6y ago
  I know enough smart people who have been pursued by the Finanzamt because their accountant and the Finanzamt had a different interpretation of the law.
- hobofan 6y ago
  > Given that this is during a beginning to try things out - without having too much money laying around to play with it. If that's what you want to do, then a Einzelunternehmen (without Handelsregistereintrag) should be fine and less beaurocratic overhead. Especially for bootstrapping or side-projects it's always useful to have a Gewerbe registered. As long as you follow the best practices (specifying 0€ expected income in the first year, etc.) and don't try to do any financial trickery, Finanzamt also shouldn't be a problem. However once you start to turn a decent profit (100+k/year) and/or start to hire people, you will be required to do more bookkeeping anyway, at which point it makes sense to found a GmbH (or even two layered ones).