17 ms·

I have a GmbH, and I'm German. The process is more complicated than in other countries because of the notary. The notary doesn't really add value in this proces

I have a GmbH, and I'm German. The process is more complicated than in other countries because of the notary. The notary doesn't really add value in this process, he/she just costs a lot of money. The German Standards Setting Institute, a private organization which provides lots of standard template documents for startups, actually make it a focus to minimize the notary costs in many of their docs (and ironically, they have notaries helping them because some notaries also think it's ridiculous). It is much simpler to set up a limited company in the UK, for comparison (which I've also done). And everything the author describes, about the IHK for example, and the Bundesanzeiger Verlag, appears completely stupid to me, too. What value exactly does the IHK provide me? I asked my tax consultant that, too, and he gave me a vague answer along the lines of "they do stuff for you and it's good", and I still have no clue what the IHK does for me. The official letter for the Bundesanzeiger Verlag states "we know that you probably received a lot of fraudulent mail asking you to wire money to other bank accounts. Do not trust them, only trust this letter and send money to the following bank account." Really? Your word on your letter vs their word on theirs? WTF?!? Yes, it is ridiculous.

tomschwiha 4y ago
IHK is responsible for local advertising and recruiting and acts as a middle agency beween government and industry. They give sometimes interesting talks and you can reach out for assistance. Not much to complain about for the price imho. Just because you don't need it on your own doesn't mean other founders or existing companies don't need it. With the foundation of a company you have some obligations and this one is one of those - strengthening the local market. (If you can't afford 150€ or 0,129% percent of your profit your business is not sustainable (referring to your value question)).
- dsnr 4y ago
  The classic argument, if you can’t pay XXX$ for some bullshit someone else invented and that doesn’t belong in 21st century, then you’re business is not sustainable. IHKs exist for the sole purpose of lining their fat pockets on other people’s hard work, like other professions in Germany, notary included. > Just because you don't need it on your own doesn't mean other founders or existing companies don't need it. Then they should be free to hire them on their own dime.
  - epolanski 4y ago
    > and that doesn’t belong in 21st century That's your opinion. > Then they should be free to hire them on their own dime. Cool thing of living in democracies is that people can propose and campaign for these changes. Maybe Germans like it as it is and it's their business?
    - pchangr 4y ago
      Having lived in Germany for 5 years.. I think you hit the nail. Germans don’t like things to change. They like what they have as it makes business predictable and decisions easy. And if that means getting behind… so be it.
    - ekelsen 4y ago
      This flippant comment completely ignores the known problems with getting rid of rent-seeking behavior. Those that benefit from it will try very hard to keep it and the vast majority that are harmed, but only by a small amount, will not organize and campaign aggressively for its removal. So it's very possible that the system is not liked by most Germans, but the dynamics are such that it stays the way it is.
- JumpCrisscross 4y ago
  > because you don't need it on your own doesn't mean other founders or existing companies don't need it We can invert this logic on IHK itself. If it can’t sell itself in a manner than sustains it’s finances, it, itself, is not sustainable.
  - tomschwiha 4y ago
    I hate paying taxes and fees. I understand anyone trying to evade or reduce them as much as legally possible. But the fee the IHK imposes is so little I honestly don't care about. For 1.000.000 € profit its 1.400€. Literally some rounding errors or customer not paying thats not worth the hassle to discuss.
    - sneak 4y ago
      Two items: 1. 0.14% of profit is not a rounding error. 2. The true cost is not the 1400€. It’s the time you waste dealing with it, your availability of which does not increase with revenue.
      - hef19898 4y ago
        Dealing with the IHK, like in paying one single invoice per calendar year? Not that I ak very happy with paying my IHK fees for a basically non-operating company, but the actual effort of dealing with them is like 5 minutes every 12 months.
    - deleted 4y ago
      [deleted]
tormeh 4y ago
The notary thing is insane. It's not a completely redundant profession, but it's not that far off. I suppose it's nice to have if two parties, non of whom the government trusts, sign a contract with each other and you need a trusted witness. But for when you submit some documents to the government? Absolute bullshit. But the German government really does not like to make itself unpopular by making professions redundant, so notaries are going to stay around for a long time. It's all a part of the general conservatism that comes with having a high median age. Everything here moves slowly. And there are benefits to that, for people who for various reasons don't like change (and there are a lot of those).
- danuker 4y ago
  > But the German government really does not like to make itself unpopular by making professions redundant Indeed, much more popular to be hit with a wall as soon as you try to start a business.
epolanski 4y ago
I disagree the notary doesn't add value, he takes legal responsibility for the truthiness of what you're signing and does all the checks to verify you comply. Is that value worth over other systems? I cannot say. But in other systems you will likely have to hire a lawyer, with the huge difference that if the lawyer makes a mistake he bears minor to no responsibilities in front of the law.
- jojobas 4y ago
  The notary doesn't check whether it's true, only that it's actually you declaring whatever you're declaring.
  - epolanski 4y ago
    He takes legal responsibility so he has to verify it. He has to verify your identity, claims, documents, do checks in various registers, transcribe and transmit information to various offices, etc, depends on what you are doing. I am not saying I love this system, but to say notaries are useless (especially in countries like germany or italy) means not understanding their service.
    - r00fus 4y ago
      Perhaps there's a difference between jurisdictions? In the US a notary only stamps that you are authenticated (ie, not fraudulent) and that the document is what it claims to be.
      - oezi 4y ago
        The notary in Germany has a prescribed list of duties which goes beyond just identifying you. There is money laundering checks and ensuring filings with the government registers as well.
        deleted 4y ago
        [deleted]
ahartmetz 4y ago
I set up a GmbH, it didn't seem like such a big deal. Regarding the fraudulent invoices, I was warned by at least two people (out of notary, tax advisor, and a friend of a friend who had done it before and outlined the process for me) about it, so no problem. My biggest problem was a useless tax advisor / accountant who missed important tax filing deadlines and such. The Finanzamt was upset and threatened deletion of (some aspect of the company, I forgot). I got another tax advisor. That solved the problem. The IHK represents the interest of local companies to the local government and also offers some (IIRC) courses, guides, meetups and such. Membership costs 70€ a year, I don't care about that.
- ido 4y ago
  I think maybe you didn’t see why it’s a big deal because you’ve never done it somewhere where it’s a lot faster/smoother? I run a UG here, it took about 3 months to set up because as a first time founder I messed up some of the weird arbitrary steps. If I’d have gotten it right it would have probably only taken 1-2 months (if I ever do it again it will probably take this long). It also cost a couple thousand € overall & still costs a few 100s every quarter for the Steuerberater et al. It’s not enough friction for me to not incorporate in Germany, but I’d prefer if they’d reduce it nevertheless. Because so many countries (like the UK, Netherlands or Singapore) don’t take this much time/friction, I suspect it’s possible to optimize.
searchableguy 4y ago
It is same in India too. The amount of time that is wasted on it is absolutely massive. There is no benefit. We have director and ID sign which is accepted in a few departments for what they ask for a notary to witness in others. Printing something on stamp paper changes absolutely nothing. The amount of mindless bureaucracy just to waste people's time gets me every time. If you want more money, just ask for it directly. Also all the penalties for not doing redundant and useless paperwork. You can pay all the taxes and be compliant yet if you don't fill form saying I paid everything, they penalize you.

tomschwiha 4y ago

IHK is responsible for local advertising and recruiting and acts as a middle agency beween government and industry. They give sometimes interesting talks and you can reach out for assistance. Not much to complain about for the price imho. Just because you don't need it on your own doesn't mean other founders or existing companies don't need it. With the foundation of a company you have some obligations and this one is one of those - strengthening the local market. (If you can't afford 150€ or 0,129% percent of your profit your business is not sustainable (referring to your value question)).

dsnr 4y ago
The classic argument, if you can’t pay XXX$ for some bullshit someone else invented and that doesn’t belong in 21st century, then you’re business is not sustainable. IHKs exist for the sole purpose of lining their fat pockets on other people’s hard work, like other professions in Germany, notary included. > Just because you don't need it on your own doesn't mean other founders or existing companies don't need it. Then they should be free to hire them on their own dime.
- epolanski 4y ago
  > and that doesn’t belong in 21st century That's your opinion. > Then they should be free to hire them on their own dime. Cool thing of living in democracies is that people can propose and campaign for these changes. Maybe Germans like it as it is and it's their business?
  - pchangr 4y ago
    Having lived in Germany for 5 years.. I think you hit the nail. Germans don’t like things to change. They like what they have as it makes business predictable and decisions easy. And if that means getting behind… so be it.
  - ekelsen 4y ago
    This flippant comment completely ignores the known problems with getting rid of rent-seeking behavior. Those that benefit from it will try very hard to keep it and the vast majority that are harmed, but only by a small amount, will not organize and campaign aggressively for its removal. So it's very possible that the system is not liked by most Germans, but the dynamics are such that it stays the way it is.
JumpCrisscross 4y ago
> because you don't need it on your own doesn't mean other founders or existing companies don't need it We can invert this logic on IHK itself. If it can’t sell itself in a manner than sustains it’s finances, it, itself, is not sustainable.
- tomschwiha 4y ago
  I hate paying taxes and fees. I understand anyone trying to evade or reduce them as much as legally possible. But the fee the IHK imposes is so little I honestly don't care about. For 1.000.000 € profit its 1.400€. Literally some rounding errors or customer not paying thats not worth the hassle to discuss.
  - sneak 4y ago
    Two items: 1. 0.14% of profit is not a rounding error. 2. The true cost is not the 1400€. It’s the time you waste dealing with it, your availability of which does not increase with revenue.
    - hef19898 4y ago
      Dealing with the IHK, like in paying one single invoice per calendar year? Not that I ak very happy with paying my IHK fees for a basically non-operating company, but the actual effort of dealing with them is like 5 minutes every 12 months.
  - deleted 4y ago
    [deleted]

tormeh 4y ago

The notary thing is insane. It's not a completely redundant profession, but it's not that far off. I suppose it's nice to have if two parties, non of whom the government trusts, sign a contract with each other and you need a trusted witness. But for when you submit some documents to the government? Absolute bullshit. But the German government really does not like to make itself unpopular by making professions redundant, so notaries are going to stay around for a long time. It's all a part of the general conservatism that comes with having a high median age. Everything here moves slowly. And there are benefits to that, for people who for various reasons don't like change (and there are a lot of those).

danuker 4y ago
> But the German government really does not like to make itself unpopular by making professions redundant Indeed, much more popular to be hit with a wall as soon as you try to start a business.

epolanski 4y ago

I disagree the notary doesn't add value, he takes legal responsibility for the truthiness of what you're signing and does all the checks to verify you comply. Is that value worth over other systems? I cannot say. But in other systems you will likely have to hire a lawyer, with the huge difference that if the lawyer makes a mistake he bears minor to no responsibilities in front of the law.

jojobas 4y ago
The notary doesn't check whether it's true, only that it's actually you declaring whatever you're declaring.
- epolanski 4y ago
  He takes legal responsibility so he has to verify it. He has to verify your identity, claims, documents, do checks in various registers, transcribe and transmit information to various offices, etc, depends on what you are doing. I am not saying I love this system, but to say notaries are useless (especially in countries like germany or italy) means not understanding their service.
  - r00fus 4y ago
    Perhaps there's a difference between jurisdictions? In the US a notary only stamps that you are authenticated (ie, not fraudulent) and that the document is what it claims to be.
    - oezi 4y ago
      The notary in Germany has a prescribed list of duties which goes beyond just identifying you. There is money laundering checks and ensuring filings with the government registers as well.
      - deleted 4y ago
        [deleted]

ahartmetz 4y ago

I set up a GmbH, it didn't seem like such a big deal. Regarding the fraudulent invoices, I was warned by at least two people (out of notary, tax advisor, and a friend of a friend who had done it before and outlined the process for me) about it, so no problem. My biggest problem was a useless tax advisor / accountant who missed important tax filing deadlines and such. The Finanzamt was upset and threatened deletion of (some aspect of the company, I forgot). I got another tax advisor. That solved the problem. The IHK represents the interest of local companies to the local government and also offers some (IIRC) courses, guides, meetups and such. Membership costs 70€ a year, I don't care about that.

ido 4y ago
I think maybe you didn’t see why it’s a big deal because you’ve never done it somewhere where it’s a lot faster/smoother? I run a UG here, it took about 3 months to set up because as a first time founder I messed up some of the weird arbitrary steps. If I’d have gotten it right it would have probably only taken 1-2 months (if I ever do it again it will probably take this long). It also cost a couple thousand € overall & still costs a few 100s every quarter for the Steuerberater et al. It’s not enough friction for me to not incorporate in Germany, but I’d prefer if they’d reduce it nevertheless. Because so many countries (like the UK, Netherlands or Singapore) don’t take this much time/friction, I suspect it’s possible to optimize.

searchableguy 4y ago

It is same in India too. The amount of time that is wasted on it is absolutely massive. There is no benefit. We have director and ID sign which is accepted in a few departments for what they ask for a notary to witness in others. Printing something on stamp paper changes absolutely nothing. The amount of mindless bureaucracy just to waste people's time gets me every time. If you want more money, just ask for it directly. Also all the penalties for not doing redundant and useless paperwork. You can pay all the taxes and be compliant yet if you don't fill form saying I paid everything, they penalize you.