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Minimum initial share capital of €12,500 to found a company where liability is limited to the firm seems like a very regressive impediment to business. For comp
by OtherShrezzing 3y ago
Minimum initial share capital of €12,500 to found a company where liability is limited to the firm seems like a very regressive impediment to business. For comparison in the UK, there's a £12 registration fee, and a £1 (one pound) minimum initial share capital. It must put limited liability out of reach of so many people.
- davidw 3y agoIt's extremely regressive. I started an effort to reform things in Italy and... it kinda sorta got some actual results, although not quite as much as I'd hoped https://blog.therealitaly.com/2015/04/16/fixing-italy-a-little-bit-at-a-time/ https://blog.therealitaly.com/2015/04/16/fixing-italy-a-litt... How many days of wages is 12,500 for the average worker? In the US, even for someone making minimum wage, you could pretty quickly cover the costs of forming an LLC, let alone someone making more.
- manuelmoreale 3y agoIsn’t that already an option in Italy with the SRL Semplificata and initial capital starting at 1€?
- _dain_ 3y agoI think that guy's campaign is what resulted in SRL Semplificata in the first place
- davidw 3y agoYes, that's correct. Other people did the real, heavy lifting to get things done, but my idea caught their attention.
- davidw 3y agoYes, I lit the fuse on that. I took a look at your site and the first thing I saw was about a guy who lives here in Bend, Oregon, where we moved from Padova. Small world!
- manuelmoreale 3y agoAh that’s quite a neat coincidence!
- intelVISA 3y agoIs running under a limited enough to limit liability? I'm no lawyer but thought you'd have to establish all the corporate infra (bank, tools, etc) to avoid piercing the veil in your daily ops.
- multjoy 3y agoYes. The corporate veil isn't a literal one - you own the company in your real name, registered to your real address, but the company is the entity that is at risk from legal action unless you've explicitly offered a personal guarantee.
- awesomeMilou 3y ago> It must put limited liability out of reach of so many people. That's the entire point. The concept that any idiot can start an LLC with no collateral (which the 25k are) is completely, absolutely, mind bogglingly bonkers to us Germans. Sounds like a scam imo.
- yieldcrv 3y agowhy is there an assumption that people starting an LLC in Germany not an idiot? no wonder you guys fell for Wirecard good thing the EU/Eurozone/EFTA/EEA lets anyone do business with a business entity registered in any member state and accept SEPA in any regional currency so some microstate with competitive laws and more egalitarian access can circumvent Germany’s exclusionary hurdles
- awesomeMilou 3y agoI'm not saying it's great, it's just that German culture has no place for no collateral LLC's. We don't do this here, our business culture is much closer to medieval trade guilds still, rather than a modern globalized economy.
- yieldcrv 3y agoI really get tired of the old world bullshit, especially regarding share capital. It seems it was more useful as a form of Proof of Stake to support old isolated currencies that doesn't have much relevancy in a monetary union. But I'm glad Luxembourgh, Estonia and others do things that mirror new world novelties, while remaining easier to bank in the EU with than non-EU entities, and look familiar to EU residents.
- mac-mc 3y agoCompanies are the legal ownership equivalents of shipping containers, and enabled a revolution in humanity despite being so simple, much like shipping containers. There is something up with your laws if that is not what they effectively act as to need collateral like that.
- 3y ago
- ofrzeta 3y agoSince 2008 you can found a "UG" ("Mini GmbH") that doesn't require that much upfront capital. It can be foundet with 1 Euro. The catch is that you need use 25% of your yearly revenue until you reached the 25k of a proper GmbH. https://www.firma.de/en/company-formation/what-is-a-ug-haftungsbeschrankt-company-in-germany-definition-and-facts/ https://www.firma.de/en/company-formation/what-is-a-ug-haftu...
- pgeorgi 3y agocorrection: 25% of the yearly profit
- ofrzeta 3y agoThanks. I never know the correct terms of revenue vs. profit :)
- pantalaimon 3y agoThe catch is also that everyone can see that you have less than 25k € in funds, so depending on what your customers are, they might not take you serious.
- Hrun0 3y agoThe registration at the notary alone already costs several hundred euros, you would be immediately bankrupt with 1€.
- jillesvangurp 3y agoExactly, there's the notary cost, the monthly banking fees, the yearly books closing and accounting related to that, chamber of commerce registration (recurring yearly as well). You also need to have a mailbox somewhere to be able to receive all the paper work. You can use your home address but it's generally not recommended and frowned upon by land lords. In my case, I burned through about 2500 euro in the first year just on stuff like that for a holding company that holds shares in my actual company. It takes about 4-5 months to get most of that behind you. Yearly running cost are about 1000 euro (accounting, recurring fees, etc.).
- Ekaros 3y agoDepends if this can be spend. On things like equipment, services and wages and so on. It is not actually that much money as runaway for most fields.
- data_maan 3y agoReading a lot on Germany business culture, my takeaway is that Germany is not made for lean founders who start small but aim big, i.e. your typical startup. It seems to be aimed either at well established business magnates who want to open yet another business (and 25k€ is nothing in that case) or small bakery-on-the-corner businesses who will go for GmbH anyways (and hence no reason to cough up 25k€). There's no path that explicitly caters to the tech founder. Someone correct me if I'm wrong.
- martin_a 3y agoStart with a "Einzelunternehmung". Registering that takes 15 to 30 minutes at your local mayors office and costs 30 Euro. From there on you can make something like 20k Euro turnover per year, if you grow out of that, you can still "invest" in a GmbH or whatever suits your needs best. On the other hand, if you are sure that you're building the next Facebook, getting the money for a GmbH together on day -1 should be no problem at all. It turns out that most companies don't make it that far, though...
- welterde 3y agoThat 22k limit is only for the small business rule, which allows the choice of not collecting VAT on sales (but on the flip side cannot deduct it on purchases). Up to a yearly revenue of 0.6M one can also use a simplified profit calculation method for taxes.
- martin_a 3y agoAh yes, you're right. I'm still not that settled in on the rules... :-D
- data_maan 3y agoStill suboptimal to have to iterate between business types as I grow (compared to other jurisdictions). This "slow grow" mindset is so typical German. No one know who the next Facebook/Meta will be - but I would guess for some VCs (not all though) it helps to show you're not some random sole trader