4 ms·

Every little speed bump you put in the way will deter some people on the margin.

by _dain_ 3y ago

yau8edq12i 3y ago
If you have 25k€ of capital but get flustered because the state wants to make sure that you are not opening a shell company for someone else and that your articles of incorporation are legally valid, then maybe you need to rethink something.
- _dain_ 3y ago
  I disagree. 25k euro is simultaneously a large and not a large amount of money. It's big enough to lock out many potential small business founders. But also many ordinary inexperienced people can have that amount of money up front, yet still be deterred by the complexity of a 6 week long incorporation process as described in this article. Especially in the early days of a company when your stress level is already through the roof dealing with the actual problems of your new business. I am generally suspicious of rhetoric like "you're a little well off, so we can heap arbitrary amounts of bullshit on you and you shouldn't complain".
  - yau8edq12i 3y ago
    > It's big enough to lock out many potential small business founders. They can open an Einzelunternehmen (sole proprietorship) instead. You shouldn't (and cannot) go all the way to the complexities of a GmbH (LLC) if your company is that tiny. > But also many ordinary inexperienced people can have that amount of money up front, yet still be deterred by the complexity of a 6 week long incorporation process as described in this article. Back to my point then. If they're not ready to put up with okay-ish bureaucratic friction in the founding phase, they're not ready to open a company. Because if you think opening the company is hard, wait until payroll or tax season is upon you. > I am generally suspicious of rhetoric like "you're a little well off, so we can heap arbitrary amounts of bullshit on you and you shouldn't complain". You're completely mischaracterizing what I said. Don't do that.
    - _dain_ 3y ago
      >They can open an Einzelunternehmen (sole proprietorship) instead. Sole proprietorship doesn't have liability protection. That's not a small thing. >You shouldn't (and cannot) go all the way to the complexities of a GmbH (LLC) if your company is that tiny. "[Thing] is too complex, don't bother with it" is not an argument against making [thing] less complex. It's actually just a restatement of the problem! Other countries make it easy to set up a limited company. UK, US, Singapore, they're all just a token fee and a handful of forms. I see no reason for Germany to make it so difficult as described in the article. A lot of successful companies were started by broke college grads out of their dorms; they would never have gotten off the ground if they had to scrounge together the equivalent 25k euros before even getting started. Hell, I don't have a spare 25k lying around and I've been working full time for 4 years.
      - pantalaimon 3y ago
        You can create a UG (haftungsbeschränkt) with all the lability protection of a GmbH with 1€ capital.
        rad_gruchalski 3y ago
        Yes, but you need to keep one third of the profit in the company until you reach the €25k, then you convert to GmbH.
        tainted_blood 3y ago
        i don't see a problem with that.
        rad_gruchalski 3y ago
        I haven't said it's a problem but virtually everyone pointing at UG as a fix to GmbH Stammkapital fails to mention it.
    - data_maan 3y ago
- bouncing 3y ago
  I had my first LLC in grade school over a summer. I didn’t make a ton of money, but I did earn enough for my first real computer, which launched my interest in programming. When my wife started her current business as a consultant, she was living off her savings from teaching high school. If you think every entrepreneur has €25k of capital, you need to reevaluate what your country thinks of entrepreneurship.
  - Scarblac 3y ago
    Why did that need limited liability though? In Germany you'd just become an entrepreneur with a simpler company type without limited liability.
    - bouncing 3y ago
      So your liability is limited. That’s like asking why you need a seatbelt. You can get the simple company type (disregarded entity) and all the advantages of limited liability with an LLC.
    - paleotrope 3y ago
      Do you want to take the risk of losing your home just to start a business?
      - Scarblac 3y ago
        Maybe the real difference is that such things might be possible in the US, but sound laughable in Europe? What would you need to mess up to be liable for huge sums as a single consultant company?
        xenospn 3y ago
        There’s tax benefits and other business-only products that require a business entity. Imagine if you’re a consultant and for whatever reason, you get sued or worse. That’s what the LLC is for.
        3y ago
bildung 3y ago
And yet the self-employment rate in Germany seems to be higher than in the US: https://genderdata.worldbank.org/indicators/sl-emp-self-zs/?gender=total https://genderdata.worldbank.org/indicators/sl-emp-self-zs/?...
- tticvs 3y ago
  Most self-employed people in Germany operate as "Kleinunternehmer" and therefore lack the liability protections provided by the LLC equivalent discussed in the article. It's apples to oranges.
- lttlrck 3y ago
  That depends how they defined self-employed. It could vary widely based on which vehicle was used, LLC, LTD, sole-proprietor. And LLC and LTD is ambiguous, yet easy to attain outside Germany.

Every little speed bump you put in the way will deter some people on the margin.

by _dain_ 3y ago

Every little speed bump you put in the way will deter some people on the margin.

If you have 25k€ of capital but get flustered because the state wants to make sure that you are not opening a shell company for someone else and that your articles of incorporation are legally valid, then maybe you need to rethink something.

_dain_ 3y ago
I disagree. 25k euro is simultaneously a large and not a large amount of money. It's big enough to lock out many potential small business founders. But also many ordinary inexperienced people can have that amount of money up front, yet still be deterred by the complexity of a 6 week long incorporation process as described in this article. Especially in the early days of a company when your stress level is already through the roof dealing with the actual problems of your new business. I am generally suspicious of rhetoric like "you're a little well off, so we can heap arbitrary amounts of bullshit on you and you shouldn't complain".
- yau8edq12i 3y ago
  > It's big enough to lock out many potential small business founders. They can open an Einzelunternehmen (sole proprietorship) instead. You shouldn't (and cannot) go all the way to the complexities of a GmbH (LLC) if your company is that tiny. > But also many ordinary inexperienced people can have that amount of money up front, yet still be deterred by the complexity of a 6 week long incorporation process as described in this article. Back to my point then. If they're not ready to put up with okay-ish bureaucratic friction in the founding phase, they're not ready to open a company. Because if you think opening the company is hard, wait until payroll or tax season is upon you. > I am generally suspicious of rhetoric like "you're a little well off, so we can heap arbitrary amounts of bullshit on you and you shouldn't complain". You're completely mischaracterizing what I said. Don't do that.
  - _dain_ 3y ago
    >They can open an Einzelunternehmen (sole proprietorship) instead. Sole proprietorship doesn't have liability protection. That's not a small thing. >You shouldn't (and cannot) go all the way to the complexities of a GmbH (LLC) if your company is that tiny. "[Thing] is too complex, don't bother with it" is not an argument against making [thing] less complex. It's actually just a restatement of the problem! Other countries make it easy to set up a limited company. UK, US, Singapore, they're all just a token fee and a handful of forms. I see no reason for Germany to make it so difficult as described in the article. A lot of successful companies were started by broke college grads out of their dorms; they would never have gotten off the ground if they had to scrounge together the equivalent 25k euros before even getting started. Hell, I don't have a spare 25k lying around and I've been working full time for 4 years.
    - pantalaimon 3y ago
      You can create a UG (haftungsbeschränkt) with all the lability protection of a GmbH with 1€ capital.
      - rad_gruchalski 3y ago
        Yes, but you need to keep one third of the profit in the company until you reach the €25k, then you convert to GmbH.
        tainted_blood 3y ago
        i don't see a problem with that.
        rad_gruchalski 3y ago
        I haven't said it's a problem but virtually everyone pointing at UG as a fix to GmbH Stammkapital fails to mention it.
  - data_maan 3y ago
bouncing 3y ago
I had my first LLC in grade school over a summer. I didn’t make a ton of money, but I did earn enough for my first real computer, which launched my interest in programming. When my wife started her current business as a consultant, she was living off her savings from teaching high school. If you think every entrepreneur has €25k of capital, you need to reevaluate what your country thinks of entrepreneurship.
- Scarblac 3y ago
  Why did that need limited liability though? In Germany you'd just become an entrepreneur with a simpler company type without limited liability.
  - bouncing 3y ago
    So your liability is limited. That’s like asking why you need a seatbelt. You can get the simple company type (disregarded entity) and all the advantages of limited liability with an LLC.
  - paleotrope 3y ago
    Do you want to take the risk of losing your home just to start a business?
    - Scarblac 3y ago
      Maybe the real difference is that such things might be possible in the US, but sound laughable in Europe? What would you need to mess up to be liable for huge sums as a single consultant company?
      - xenospn 3y ago
        There’s tax benefits and other business-only products that require a business entity. Imagine if you’re a consultant and for whatever reason, you get sued or worse. That’s what the LLC is for.
      - 3y ago

bildung 3y ago

And yet the self-employment rate in Germany seems to be higher than in the US: https://genderdata.worldbank.org/indicators/sl-emp-self-zs/?gender=total https://genderdata.worldbank.org/indicators/sl-emp-self-zs/?...

tticvs 3y ago
Most self-employed people in Germany operate as "Kleinunternehmer" and therefore lack the liability protections provided by the LLC equivalent discussed in the article. It's apples to oranges.
lttlrck 3y ago
That depends how they defined self-employed. It could vary widely based on which vehicle was used, LLC, LTD, sole-proprietor. And LLC and LTD is ambiguous, yet easy to attain outside Germany.