5 ms·

You need 25k€ to register a GmbH, but you can nowadays register a UG which only requires 1€ and can later be converted to a GmbH

by tiluha 1y ago

harha 1y ago
Which will cost many thousands in admin per year
- b-mmxx 1y ago
  Can you elaborate on what you mean by that? Annual admin costs very much depend on how complex the business is, no? The primary recurring obligation for a UG is the mandatory retention of 25% of annual net profits until the share capital reaches €25k, enabling tax-neutral conversion to a GmbH. What I could think of for UG with idea on converting to GmbH, you could have: - UG setup cost (fairly low compared to GmbH) - UG/GmbH accounting & tax compliance - Commercial register updates - Notary fees for structural changes, and eventually the conversion process
- ido 1y ago
  I run a small (software) startup in Berlin, the administrative cost is more like €1000/year (of course increasing the bigger your business gets) .
Propelloni 1y ago
First, it is sufficient to only pay 50 % of the stock capital at registration of the GMbH, ie. 12500 EUR. Obviously you also have less operating capital then. Second, the money is not gone. It is right there in the company's account. You use it to pay company bills. The only thing annoying about German GmbH is that it can take 6-8 weeks until you get your tax id and registration numbers. You can, of course, already do business with the name postfix "i.G.", ie. instead of "Foobar GmbH" you write "Foobar GmbH i.G." and done. EDIT: typo
- nottorp 1y ago
  > Second, the money is not gone. It is right there in the company's account. You use it to pay company bills. That's fine if you start a restaurant or small workshop and need money for salaries, materials etc, of course. It's a barrier to entry when you can start something digital only with just a person or three putting in sweat equity and zero to very little actual cash.
  - notpushkin 1y ago
    Why not try Estonia instead? You’ll need to get an e-signature card (“e-Residency”) which might take about a month, then you just submit an online form and get your company number the same day. Mimimum capital is 1 €, and the fees are about 400 € for setup and 100 €/yr for virtual address. https://www.e-resident.gov.ee/eresidency-germans/ https://www.e-resident.gov.ee/eresidency-germans/ The downside, of course, is that you probably won’t get any direct(-ish) subsidies from Germany — although any pan-EU options should be on the table.
    - Propelloni 1y ago
      > Mimimum capital is 1 €, If you are talking about an OÜ this is often repeated and technically wrong (the best kind of wrong). One, actually the minimum capital requirement is 0.01 Euro per shareholder, and two, Estonian courts are pretty clear that in an OÜ with less than 2500 EUR capital the shareholders are personally liable to cover the difference between share capital and 2500 EUR to trustees.
      - notpushkin 1y ago
        Yeah, you’re technically right (the best kind of right!) — on both counts. However, if I understand everything correctly (IANAL), personal liability is basically the same. If you go for 2500 € capital and your company becomes undercapitalized, you’ll still be personally liable for any claims against your company, no? (But personally, I just like how this opens opportunities even for people for whom 2500 € is a serious amount of money. Granted, you probably shouldn’t open up a company in this kind of situation, but at least you can!)

You need 25k€ to register a GmbH, but you can nowadays register a UG which only requires 1€ and can later be converted to a GmbH

by tiluha 1y ago

You need 25k€ to register a GmbH, but you can nowadays register a UG which only requires 1€ and can later be converted to a GmbH

harha 1y ago

Which will cost many thousands in admin per year

b-mmxx 1y ago
Can you elaborate on what you mean by that? Annual admin costs very much depend on how complex the business is, no? The primary recurring obligation for a UG is the mandatory retention of 25% of annual net profits until the share capital reaches €25k, enabling tax-neutral conversion to a GmbH. What I could think of for UG with idea on converting to GmbH, you could have: - UG setup cost (fairly low compared to GmbH) - UG/GmbH accounting & tax compliance - Commercial register updates - Notary fees for structural changes, and eventually the conversion process
ido 1y ago
I run a small (software) startup in Berlin, the administrative cost is more like €1000/year (of course increasing the bigger your business gets) .

Propelloni 1y ago

First, it is sufficient to only pay 50 % of the stock capital at registration of the GMbH, ie. 12500 EUR. Obviously you also have less operating capital then. Second, the money is not gone. It is right there in the company's account. You use it to pay company bills. The only thing annoying about German GmbH is that it can take 6-8 weeks until you get your tax id and registration numbers. You can, of course, already do business with the name postfix "i.G.", ie. instead of "Foobar GmbH" you write "Foobar GmbH i.G." and done. EDIT: typo

nottorp 1y ago
> Second, the money is not gone. It is right there in the company's account. You use it to pay company bills. That's fine if you start a restaurant or small workshop and need money for salaries, materials etc, of course. It's a barrier to entry when you can start something digital only with just a person or three putting in sweat equity and zero to very little actual cash.
- notpushkin 1y ago
  Why not try Estonia instead? You’ll need to get an e-signature card (“e-Residency”) which might take about a month, then you just submit an online form and get your company number the same day. Mimimum capital is 1 €, and the fees are about 400 € for setup and 100 €/yr for virtual address. https://www.e-resident.gov.ee/eresidency-germans/ https://www.e-resident.gov.ee/eresidency-germans/ The downside, of course, is that you probably won’t get any direct(-ish) subsidies from Germany — although any pan-EU options should be on the table.
  - Propelloni 1y ago
    > Mimimum capital is 1 €, If you are talking about an OÜ this is often repeated and technically wrong (the best kind of wrong). One, actually the minimum capital requirement is 0.01 Euro per shareholder, and two, Estonian courts are pretty clear that in an OÜ with less than 2500 EUR capital the shareholders are personally liable to cover the difference between share capital and 2500 EUR to trustees.
    - notpushkin 1y ago
      Yeah, you’re technically right (the best kind of right!) — on both counts. However, if I understand everything correctly (IANAL), personal liability is basically the same. If you go for 2500 € capital and your company becomes undercapitalized, you’ll still be personally liable for any claims against your company, no? (But personally, I just like how this opens opportunities even for people for whom 2500 € is a serious amount of money. Granted, you probably shouldn’t open up a company in this kind of situation, but at least you can!)