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I think this is one of the reasons why Germany doesn't have a startup ecosystem. People who are loosely playing with the idea of running their own tiny company

I think this is one of the reasons why Germany doesn't have a startup ecosystem. People who are loosely playing with the idea of running their own tiny company (e.g. as a student side gig, not with the "I'm planning this like a businessperson and here's my plan how to turn it into a unicorn and how to exit" approach) take a look at the system and bureaucracy, and simply give up and forever write off the concept of running your own company as a worthwhile option. Even becoming an independent contractor is fraught with many of the same hurdles. This creates a strong push towards employment vs. doing your own thing.

rrrrrrrrrrrrr 4y ago
As a student sidegig you can easily just found a small businesses for like 35 EUR and do business. There’s also GbRs that can theoretically be formed on a paper towel. Thought, it will probably not be easy to raise money this way.
- andi999 4y ago
  And you are not eligible for government startup funding support after you finish your degree, since it only supporte your first company ('exist' program).
- dathinab 4y ago
  Universities also provide consulting and crash curses for stuff like that.
  - teddyh 4y ago
    A crash curse sounds risky.
    - dathinab 4y ago
      It would have been good enough to avoid at least one of the mistake done. but yes, just relying on some crash course and nothing else is never recommendable
      - teddyh 4y ago
        I was just making a joke about the misspelling.
- SkyAndSand 4y ago
  .. and you are personally liable for anything damages caused by the business.
  - sokoloff 4y ago
    Surely the requirement that a limited liability company has some minimum assets is reasonable for exactly that reason. You wouldn’t want someone to be able to form a company whose liability was limited to couple hundred Euros of assets the company was formed with.
    - lucakiebel 4y ago
      That’s exactly what the UG (haftungsbeschränkt) does, you can set one up with (theoretically) 1€ (though in practice it’s more like 250€), and you then have a GmbH with lower liability
      - harha 4y ago
        Yeah but pay many thousands per year for filing taxes etc and spend years to dissolve. Along with all the personal liability as director. UG is a massive scam in that sense, definitely not what’s advertised.
      - pantalaimon 4y ago
        And that’s exactly why a UG doesn’t look trustworthy to most business partners
    - SkyAndSand 4y ago
      Well, isn't that exactly what is happening if you set up a US LLC or a UK LTD? You get limited liability and can set up the company with a couple hundred dollars or pounds. Why would that be a problem in Germany but not in these jurisdictions?
      - ElevenLathe 4y ago
        IANAL but I think the answer for US single-member LLCs is that if you were ever to actually say, cause 100k of damage to somebody else's property through the actions of your single-person LLC and they were to take you to court, the judge would quickly find that the liability passes through to you, so it's not really all that different from a sole proprietorship (aka just doing business as yourself) in that regard.
raverbashing 4y ago
> one of the reasons why Germany doesn't have a startup ecosystem. But they do. In fact every hiring post here has plenty of German companies (not defending bureaucracy here - but it is good to know the rules and tricks before doing this kind of stuff - in fact I'd even argue you might just establish your company somewhere else in the EU, or even somewhere close) Also - even in the US there are foot-guns that you can get into if you don't know what you're doing
hef19898 4y ago
It is stupidly easy to create a GmbH or UG, especially the UG. Also very cheap, if you push it two days are enough, will cost you around 100 bucks. And if you just want to run a side business, one that doesn't have the potential to ruin you, just run it as an independent income. You can even have your employees participate in your GmbH, either in enquity or profit. That most German start-ups don't simply means they want to keep salaries down by paying in potentially worthless enquity.
- marcinzm 4y ago
  >It is stupidly easy to create a GmbH or UG, especially the UG. Also very cheap, if you push it two days are enough, will cost you around 100 bucks. What about the required 25k to start a GmbH?
  - nudpiedo 4y ago
    Nowadays it is 12,5 and it becomes the capital of the company which you can use to buy infrastructure and for the payroll.
    - marcinzm 4y ago
      12,500 is a lot more than 100 no matter where it goes to.
      - hef19898 4y ago
        It is. But how is your prospective millionaire entrepreneur with his 100 buck corporation paying his bills? The 12.5 k from a GmbH can be used to pay your own salary for example. Or IT, or pay for AWS,... Point being, even a dirt cheap corporation will need some money at one point.
- thesimon 4y ago
  Filings will cost you at least 100/year for nothing. And you have to keep 25% of your profits you have 25k€. All unnecessarily complex.
daanlo 4y ago
Germany, particularly Berlin, have a pretty vibrant startup eco-system. If you are just trying ideas, there is no need to register a business (legally you only have to do this once you intend to follow through long term). You can register a business for 35€ - most cities offer this online. Registering a limited liability company is a little more complicated (you need a 1h appointment with a notary), but can be done from 500€ onwards. If you plan to do less than 50.000€ in revenue this year you qualify as a micro business and don‘t need to file or pay VAT. You only need to file an annual account within a year of the financial year ending. Cost of this starts at around 500€. Our legal system and corporate culture is set up in a way that you are very unlikely to be sued for damages. So even medium sized companies (several million in revenue) frequently operate as full liability companies.
mbeex 4y ago
> Even becoming an independent contractor is fraught with many of the same hurdles. It depends, there is no simple entity "independent contractor". If you can run your business as Freiberufler - roughly but not quite a freelancer - you may have found a pretty lightweight framework - even compared to other jurisdictions. Simpler accounting, no need for balance sheets and therefore for a tax advisor in most cases (still recommended). Liability can be largely limited by insurance, depending on the field of business. I'm doing this for over 20 years and I simply have no need to own any kind of corporation. Of course, YMMV.

rrrrrrrrrrrrr 4y ago

As a student sidegig you can easily just found a small businesses for like 35 EUR and do business. There’s also GbRs that can theoretically be formed on a paper towel. Thought, it will probably not be easy to raise money this way.

andi999 4y ago
And you are not eligible for government startup funding support after you finish your degree, since it only supporte your first company ('exist' program).
dathinab 4y ago
Universities also provide consulting and crash curses for stuff like that.
- teddyh 4y ago
  A crash curse sounds risky.
  - dathinab 4y ago
    It would have been good enough to avoid at least one of the mistake done. but yes, just relying on some crash course and nothing else is never recommendable
    - teddyh 4y ago
      I was just making a joke about the misspelling.
SkyAndSand 4y ago
.. and you are personally liable for anything damages caused by the business.
- sokoloff 4y ago
  Surely the requirement that a limited liability company has some minimum assets is reasonable for exactly that reason. You wouldn’t want someone to be able to form a company whose liability was limited to couple hundred Euros of assets the company was formed with.
  - lucakiebel 4y ago
    That’s exactly what the UG (haftungsbeschränkt) does, you can set one up with (theoretically) 1€ (though in practice it’s more like 250€), and you then have a GmbH with lower liability
    - harha 4y ago
      Yeah but pay many thousands per year for filing taxes etc and spend years to dissolve. Along with all the personal liability as director. UG is a massive scam in that sense, definitely not what’s advertised.
    - pantalaimon 4y ago
      And that’s exactly why a UG doesn’t look trustworthy to most business partners
  - SkyAndSand 4y ago
    Well, isn't that exactly what is happening if you set up a US LLC or a UK LTD? You get limited liability and can set up the company with a couple hundred dollars or pounds. Why would that be a problem in Germany but not in these jurisdictions?
    - ElevenLathe 4y ago
      IANAL but I think the answer for US single-member LLCs is that if you were ever to actually say, cause 100k of damage to somebody else's property through the actions of your single-person LLC and they were to take you to court, the judge would quickly find that the liability passes through to you, so it's not really all that different from a sole proprietorship (aka just doing business as yourself) in that regard.

raverbashing 4y ago

> one of the reasons why Germany doesn't have a startup ecosystem. But they do. In fact every hiring post here has plenty of German companies (not defending bureaucracy here - but it is good to know the rules and tricks before doing this kind of stuff - in fact I'd even argue you might just establish your company somewhere else in the EU, or even somewhere close) Also - even in the US there are foot-guns that you can get into if you don't know what you're doing

hef19898 4y ago

It is stupidly easy to create a GmbH or UG, especially the UG. Also very cheap, if you push it two days are enough, will cost you around 100 bucks. And if you just want to run a side business, one that doesn't have the potential to ruin you, just run it as an independent income. You can even have your employees participate in your GmbH, either in enquity or profit. That most German start-ups don't simply means they want to keep salaries down by paying in potentially worthless enquity.

marcinzm 4y ago
>It is stupidly easy to create a GmbH or UG, especially the UG. Also very cheap, if you push it two days are enough, will cost you around 100 bucks. What about the required 25k to start a GmbH?
- nudpiedo 4y ago
  Nowadays it is 12,5 and it becomes the capital of the company which you can use to buy infrastructure and for the payroll.
  - marcinzm 4y ago
    12,500 is a lot more than 100 no matter where it goes to.
    - hef19898 4y ago
      It is. But how is your prospective millionaire entrepreneur with his 100 buck corporation paying his bills? The 12.5 k from a GmbH can be used to pay your own salary for example. Or IT, or pay for AWS,... Point being, even a dirt cheap corporation will need some money at one point.
thesimon 4y ago
Filings will cost you at least 100/year for nothing. And you have to keep 25% of your profits you have 25k€. All unnecessarily complex.

daanlo 4y ago

Germany, particularly Berlin, have a pretty vibrant startup eco-system. If you are just trying ideas, there is no need to register a business (legally you only have to do this once you intend to follow through long term). You can register a business for 35€ - most cities offer this online. Registering a limited liability company is a little more complicated (you need a 1h appointment with a notary), but can be done from 500€ onwards. If you plan to do less than 50.000€ in revenue this year you qualify as a micro business and don‘t need to file or pay VAT. You only need to file an annual account within a year of the financial year ending. Cost of this starts at around 500€. Our legal system and corporate culture is set up in a way that you are very unlikely to be sued for damages. So even medium sized companies (several million in revenue) frequently operate as full liability companies.

mbeex 4y ago

> Even becoming an independent contractor is fraught with many of the same hurdles. It depends, there is no simple entity "independent contractor". If you can run your business as Freiberufler - roughly but not quite a freelancer - you may have found a pretty lightweight framework - even compared to other jurisdictions. Simpler accounting, no need for balance sheets and therefore for a tax advisor in most cases (still recommended). Liability can be largely limited by insurance, depending on the field of business. I'm doing this for over 20 years and I simply have no need to own any kind of corporation. Of course, YMMV.