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> Then you have one year to liquidate. Not sure what’s difficult about it. What is funny is that germans don’t even realize how absurd this looks for the rest

by dsnr 4y ago

> Then you have one year to liquidate. Not sure what’s difficult about it. What is funny is that germans don’t even realize how absurd this looks for the rest of the world. Compare this to closing a company in two weeks in the United States.

Xylakant 4y ago
Funny how the Americans don’t even realize how absurd that looks for the rest of the world. The reason for this is that the company must pay any outstanding debt before it can shut down - and you need to give creditors a window to write their invoices. And you’re legally allowed to write and collect on invoices for work (or deliveries) that date back up to three years. So what happens when you liquidate a GmbH is that a notice is placed in the register for all your creditors to see if you have an outstanding debt with them - and then you just have to wait.
- harha 4y ago
  Well in theory that is. Who actually reads the notice and if the company hasn’t paid yet, how do you know they still have money? It’s a bureaucratic exercise that most countries manage to avoid.
  - Xylakant 4y ago
    The register is electronic and it’s common that people monitor it, especially if you have large sums outstanding. I have done so in the past. I know of multiple other cases where people monitored the register. If they don’t have money and outstanding debt, they can’t liquidate the company - they’ll need to file for bankruptcy, which is an entirely different thing.
  - nosianu 4y ago
    I closed a GmbH. How is this complicated? You don't have to do anything for or during that closing period! The only thing that happens is that you get the final "it's been closed for good now" after that period. I let the "Steuerberater" handle everything while the GmbH was active anyway, the fee was not that much. I just gave them all my receipts and they handled accounting completely. I was a bit pissed at the Steuerberater fees accumulating during closing, which were a bit much, but I negotiated that down significantly. But again, the least complicated part of it was having that waiting period. It had no impact on me whatsoever, not for taxes, not for anything. I just got a message after that time was over, and another one even later from the tax authorities that they are satisfied and would never retroactively look at the company again, so that I knew I would not get any tax surprises from them. Which I did get from the US IRS - years after leaving the US they wanted money from me. When you close the GmbH it's not like you have to keep anything. You really close it, bank account and all too. The waiting period has nothing to do with you, unless creditors show up. The only thing that happened was that that very final message about the final closing only comes after that period, without any creditors showing up it has no impact on you and you don't have to do or pay anything. I had had an "offene Handelsgesellschaft" (OHG) with someone before I had the GmbH. The limited liability company forms, GmbH and AG, are much worse than the ones with a fully liable owner. Those are much easier to set up, and they too can become quite big companies and are quite commonly in use in Germany even for established firms. But it's true, the effort around the liability corporation forms is enormous, and lots and lots of fees everywhere. You can shield yourself easily and outsource it all, but the got-to company form that Germany aimed for historically for the "common man" to quickly and easily set up a company was one of the two where one person or a group own the company and are liable. Limited liability was (still is) deliberately kept to be much more demanding. https://www.ihk.de/stuttgart/english/services2/business-support/legal-forms-of-doing-business-in-germany-3977966 https://www.ihk.de/stuttgart/english/services2/business-supp... Forms 3 and 4, and 5 in that list, sole proprietorships and general and limited partnerships. Here is a table with some numbers, how many firms of each form there are in three size categories by nr. of employees: https://www.destatis.de/DE/Themen/Branchen-Unternehmen/Unternehmen/Unternehmensregister/Tabellen/unternehmen-rechtsformen-wz08.html https://www.destatis.de/DE/Themen/Branchen-Unternehmen/Unter... (and just for comparison, the data for the US, scroll down for the table: https://tingen.law/2022/business-structure-statistics/54443/ https://tingen.law/2022/business-structure-statistics/54443/) Maybe too many people go for a GmbH too quickly? A KG with one main owner and partners only liable with their share and they can be any legal entity, so businesses instead of people can be a partner, would probably work just as well. I know I went for the GmbH form out of such stupidity, because it was "cool" and internationally it was the form everybody was talking about (limited liability. hey!) but I would have been better off with another form. The "limited liability" has very limited benefits if you are a new founder anyway, nobody is going to give the new company any credit without someone being liable in addition because creditors are not stupid.

by dsnr 4y ago

Xylakant 4y ago

Funny how the Americans don’t even realize how absurd that looks for the rest of the world. The reason for this is that the company must pay any outstanding debt before it can shut down - and you need to give creditors a window to write their invoices. And you’re legally allowed to write and collect on invoices for work (or deliveries) that date back up to three years. So what happens when you liquidate a GmbH is that a notice is placed in the register for all your creditors to see if you have an outstanding debt with them - and then you just have to wait.

harha 4y ago
Well in theory that is. Who actually reads the notice and if the company hasn’t paid yet, how do you know they still have money? It’s a bureaucratic exercise that most countries manage to avoid.
- Xylakant 4y ago
  The register is electronic and it’s common that people monitor it, especially if you have large sums outstanding. I have done so in the past. I know of multiple other cases where people monitored the register. If they don’t have money and outstanding debt, they can’t liquidate the company - they’ll need to file for bankruptcy, which is an entirely different thing.
- nosianu 4y ago
  I closed a GmbH. How is this complicated? You don't have to do anything for or during that closing period! The only thing that happens is that you get the final "it's been closed for good now" after that period. I let the "Steuerberater" handle everything while the GmbH was active anyway, the fee was not that much. I just gave them all my receipts and they handled accounting completely. I was a bit pissed at the Steuerberater fees accumulating during closing, which were a bit much, but I negotiated that down significantly. But again, the least complicated part of it was having that waiting period. It had no impact on me whatsoever, not for taxes, not for anything. I just got a message after that time was over, and another one even later from the tax authorities that they are satisfied and would never retroactively look at the company again, so that I knew I would not get any tax surprises from them. Which I did get from the US IRS - years after leaving the US they wanted money from me. When you close the GmbH it's not like you have to keep anything. You really close it, bank account and all too. The waiting period has nothing to do with you, unless creditors show up. The only thing that happened was that that very final message about the final closing only comes after that period, without any creditors showing up it has no impact on you and you don't have to do or pay anything. I had had an "offene Handelsgesellschaft" (OHG) with someone before I had the GmbH. The limited liability company forms, GmbH and AG, are much worse than the ones with a fully liable owner. Those are much easier to set up, and they too can become quite big companies and are quite commonly in use in Germany even for established firms. But it's true, the effort around the liability corporation forms is enormous, and lots and lots of fees everywhere. You can shield yourself easily and outsource it all, but the got-to company form that Germany aimed for historically for the "common man" to quickly and easily set up a company was one of the two where one person or a group own the company and are liable. Limited liability was (still is) deliberately kept to be much more demanding. https://www.ihk.de/stuttgart/english/services2/business-support/legal-forms-of-doing-business-in-germany-3977966 https://www.ihk.de/stuttgart/english/services2/business-supp... Forms 3 and 4, and 5 in that list, sole proprietorships and general and limited partnerships. Here is a table with some numbers, how many firms of each form there are in three size categories by nr. of employees: https://www.destatis.de/DE/Themen/Branchen-Unternehmen/Unternehmen/Unternehmensregister/Tabellen/unternehmen-rechtsformen-wz08.html https://www.destatis.de/DE/Themen/Branchen-Unternehmen/Unter... (and just for comparison, the data for the US, scroll down for the table: https://tingen.law/2022/business-structure-statistics/54443/ https://tingen.law/2022/business-structure-statistics/54443/) Maybe too many people go for a GmbH too quickly? A KG with one main owner and partners only liable with their share and they can be any legal entity, so businesses instead of people can be a partner, would probably work just as well. I know I went for the GmbH form out of such stupidity, because it was "cool" and internationally it was the form everybody was talking about (limited liability. hey!) but I would have been better off with another form. The "limited liability" has very limited benefits if you are a new founder anyway, nobody is going to give the new company any credit without someone being liable in addition because creditors are not stupid.