6 ms·

Companies are treated like persons legally and while I'm sure there is too much bureaucracy in many places, I'm also sure that there are important documents tha

Companies are treated like persons legally and while I'm sure there is too much bureaucracy in many places, I'm also sure that there are important documents that should be required. For example to make sure that a company can be held responsible when it breaks the law. There are already enough loopholes to disconnect legal responsibility from profit-taking, and not every company is benign. Sure, if the documents cannot be acquired in X days for other reasons, that would undermine the tagline. But I don't think that's the main risk. Let's not forget that some requirements make sense. In Germany, the government recently decided that some minor applications to local governments must be answered within X days or else are automatically approved. But "minor" is important here... great for a small business that applies for a permit to renovate there outdoor seatings or whatever. I wouldn't want for company foundings to be auto-approved without submitting the legally required documents.

egorfine 9mo ago
There is a huge spectrum between "require impossible documentation" and "require none". Germany and EU are heading towards the former.
- embedding-shape 9mo ago
  Literally the whole effort this submission, is about is moving a tiny step towards "require none" but not go all the way, compared to how it is today. You chose the wrong submission to comment that on, in any "new regulation in EU" submission that might have been appropriate, but this move is quite the opposite of what you say is happening.
  - egorfine 9mo ago
    > this move My point is that this move will not happen. I don't believe EU can overcome a huge and extremely motivated army of bureaucrats.
  - philipallstar 9mo ago
    This isn't an EU move, is it?
    - embedding-shape 9mo ago
      > This isn't an EU move, is it? What, exactly, do you mean with "EU move"? I guess technically it's a "European Commission" move, but overall it's a European and EU move, unless "move" has some specific meaning to you.
- Bewelge 9mo ago
  German here. That's not true. What crazy documentation do you require? An ID, proof of residence, and a business plan? (edit: you don't even need a business plan) That being said, everything about the process is annoying and you always have the feeling that you're doing something wrong or forgetting something. Together with some ridiculously slow processing times, it's the perfect combination to frustrate you and I'm sure it ultimately reduces innovation. But in reality, getting all the paperwork together is probably a couple of hours of work. You can buy services that do it for you for a couple of hundred Euros.
  - jagrsw 9mo ago
    I don't know much about corporations, but why business plans are needed at all? I mean, for EU citizens. bank (loans), immigration and investors can be interested, but their interests are not covering every corporation out there.
    - embedding-shape 9mo ago
      It's basically a proof of "most basic effort" that you're serious. You could probably note down some stuff on a single A4 and get it approved, it doesn't have to be a 40 page dossier. Kind of like fizzbuzz, just something really simple and most basic to get rid of the "easy scams" and so on. Edit: So "easy scams" are probably the wrong word, I initially wrote "riffraff" because in my mothertoungue that isn't so... disparaging, but what I meant was that it's used as "bare minimum filter" basically.
      - zdragnar 9mo ago
        That doesn't really sound like a barrier to the easy scams at all. It just sounds like something someone once thought would be a good idea and now everyone has to do it because that's the process.
      - philipallstar 9mo ago
        How would this get rid of easy scams?
direwolf20 9mo ago
> For example to make sure that a company can be held responsible when it breaks the law. This is the reason Germany hates small companies. Germany wants you to be a sole trader with no liability shield. Some people hack the system by registering a company in another EU state such as Lithuania.
- erispoe 9mo ago
  That's not a hack, if you operate the entity from Germany, it must be registered in Germany. It's often touted as a tax loophole, but it's not. Tax authorities do not care about you unless you actually make money, then they will come after you.
  - direwolf20 9mo ago
    Which law says it must be registered in Germany?
    - johannes1234321 9mo ago
      It must be seated where the business happens for compliance with tax laws. But you may have a French S.a.r.l. in Germany and thus fall under their company law (with impact on publication responsibilities, company governance etc.) While for some cases there is room for abuse (like Amazon Kindle eBooks are sold to Germany by a company situated in Luxembourg, while only selling via amazon.de to audience with German residency) However my employer is a Dutch B.V. with headquarters in Germany, thus they avoid having to form a board with works council representatives as a German GmbH (or AG) of comparable size would require.
      - jkaplowitz 9mo ago
        Specifically, it must be seated where the principal management of the business occurs. So if the executives and board meetings and books and records are strategically located in one country and most of the business operations are in a second, it's valid and probably even required for the business to have its tax residence in the first country rather than the second. It may very well have a permanent establishment and therefore some tax obligations in the second country, but that's different from the second country being the primary tax residence.
amluto 9mo ago
In most (all?) US states, you can just start a company. You file a form, usually online, with the state, and you ask the IRS, online, for an ID number called an EIN. Technically you have a valid company after just step 1, but good luck getting any sort of bank account without doing step 2. If you want to employ people, you need to file gratuitously obnoxious paperwork, but it’s still automatic. What’s the actual problem? Why should it be harder? Some states like California dislike small businesses in that they charge $800/year. But that’s pretty much it.
- egorfine 9mo ago
  > Why should it be harder? Marx won. You should learn how easy it is to fire an employee in a software development company in Germany. (spoiler: almost impossible)
nicbou 9mo ago
> In Germany, the government recently decided that some minor applications to local governments must be answered within X days or else are automatically approved. I believe it was just a crazy idea that was submitted recently. The closest real thing is 75 VwGO which requires a decision in 3 months. The immigration office has been failing to meet that requirement for years with few consequences, because enforcing that right is expensive and takes even longer.
AnthonyMouse 9mo ago
> For example to make sure that a company can be held responsible when it breaks the law. In general this has nothing to do with incorporation documents. If a company unintentionally causes a large amount of damages, the company is going to get wiped out, but then you're just having the judge order the bank to transfer the company's assets to the victims. The owners of the company aren't particularly relevant except insofar as they now own a company whose value has been zeroed out, and they might be the ones to show up in court to argue against that being what should happen. If the people at a company intentionally cause a large amount of damages, the corporation is irrelevant. If your "corporation" is in the business of stealing catalytic converters and the police come to arrest you, the person with the sawzall in their hands is going to jail, and if that person was hired to do it they're going to be offered a deal to testify against the person who hired them etc. Pointing to your articles of incorporation at that point isn't going to save you. That isn't what LLCs do, actual criminal enterprises will frequently have not listed the true principals on the documents anyway, and the government is going to try to prosecute the perpetrators rather than the patsies on the documents. There is no real point in making this a burden for honest people. If they're honest then it doesn't matter. If they're not honest then you'd be a fool to trust what they wrote on a form anyway.
- aaravchen 9mo ago
  Is that actually how corporations work in the EU? Only having experience in the US, I can tell you conclusively that if the company states it's job is to make and promote poison for untrained people to spray everywhere, let's call it "CircleHeavenward" for example, and they successfully convince enough people to buy and use it, but then it's found they knowingly told people to spray it unsafely and knew it would kill millions of people but his it, and millions of the customers neighbors are now dying, absolutely nothing will be done. Because they're a successful corporation and therefore completely immune to any responsibility for any outright criminal activity. Doubly so it they can successfully claim more than one person was involved in carrying out that criminal activity, and therefore the responsibility for it is distributed.
  - AnthonyMouse 9mo ago
danielfoster 9mo ago
This is admirable but the process in Germany right now is overly burdensome. It probably does weed out some bad actors (and good actors) not because of the documents required or any sort of checks performed, but because it takes months and costs thousands of euros.

egorfine 9mo ago

There is a huge spectrum between "require impossible documentation" and "require none". Germany and EU are heading towards the former.

embedding-shape 9mo ago
Literally the whole effort this submission, is about is moving a tiny step towards "require none" but not go all the way, compared to how it is today. You chose the wrong submission to comment that on, in any "new regulation in EU" submission that might have been appropriate, but this move is quite the opposite of what you say is happening.
- egorfine 9mo ago
  > this move My point is that this move will not happen. I don't believe EU can overcome a huge and extremely motivated army of bureaucrats.
- philipallstar 9mo ago
  This isn't an EU move, is it?
  - embedding-shape 9mo ago
    > This isn't an EU move, is it? What, exactly, do you mean with "EU move"? I guess technically it's a "European Commission" move, but overall it's a European and EU move, unless "move" has some specific meaning to you.
Bewelge 9mo ago
German here. That's not true. What crazy documentation do you require? An ID, proof of residence, and a business plan? (edit: you don't even need a business plan) That being said, everything about the process is annoying and you always have the feeling that you're doing something wrong or forgetting something. Together with some ridiculously slow processing times, it's the perfect combination to frustrate you and I'm sure it ultimately reduces innovation. But in reality, getting all the paperwork together is probably a couple of hours of work. You can buy services that do it for you for a couple of hundred Euros.
- jagrsw 9mo ago
  I don't know much about corporations, but why business plans are needed at all? I mean, for EU citizens. bank (loans), immigration and investors can be interested, but their interests are not covering every corporation out there.
  - embedding-shape 9mo ago
    It's basically a proof of "most basic effort" that you're serious. You could probably note down some stuff on a single A4 and get it approved, it doesn't have to be a 40 page dossier. Kind of like fizzbuzz, just something really simple and most basic to get rid of the "easy scams" and so on. Edit: So "easy scams" are probably the wrong word, I initially wrote "riffraff" because in my mothertoungue that isn't so... disparaging, but what I meant was that it's used as "bare minimum filter" basically.
    - zdragnar 9mo ago
      That doesn't really sound like a barrier to the easy scams at all. It just sounds like something someone once thought would be a good idea and now everyone has to do it because that's the process.
    - philipallstar 9mo ago
      How would this get rid of easy scams?

direwolf20 9mo ago

> For example to make sure that a company can be held responsible when it breaks the law. This is the reason Germany hates small companies. Germany wants you to be a sole trader with no liability shield. Some people hack the system by registering a company in another EU state such as Lithuania.

erispoe 9mo ago
That's not a hack, if you operate the entity from Germany, it must be registered in Germany. It's often touted as a tax loophole, but it's not. Tax authorities do not care about you unless you actually make money, then they will come after you.
- direwolf20 9mo ago
  Which law says it must be registered in Germany?
  - johannes1234321 9mo ago
    It must be seated where the business happens for compliance with tax laws. But you may have a French S.a.r.l. in Germany and thus fall under their company law (with impact on publication responsibilities, company governance etc.) While for some cases there is room for abuse (like Amazon Kindle eBooks are sold to Germany by a company situated in Luxembourg, while only selling via amazon.de to audience with German residency) However my employer is a Dutch B.V. with headquarters in Germany, thus they avoid having to form a board with works council representatives as a German GmbH (or AG) of comparable size would require.
    - jkaplowitz 9mo ago
      Specifically, it must be seated where the principal management of the business occurs. So if the executives and board meetings and books and records are strategically located in one country and most of the business operations are in a second, it's valid and probably even required for the business to have its tax residence in the first country rather than the second. It may very well have a permanent establishment and therefore some tax obligations in the second country, but that's different from the second country being the primary tax residence.

amluto 9mo ago

In most (all?) US states, you can just start a company. You file a form, usually online, with the state, and you ask the IRS, online, for an ID number called an EIN. Technically you have a valid company after just step 1, but good luck getting any sort of bank account without doing step 2. If you want to employ people, you need to file gratuitously obnoxious paperwork, but it’s still automatic. What’s the actual problem? Why should it be harder? Some states like California dislike small businesses in that they charge $800/year. But that’s pretty much it.

egorfine 9mo ago
> Why should it be harder? Marx won. You should learn how easy it is to fire an employee in a software development company in Germany. (spoiler: almost impossible)

nicbou 9mo ago

> In Germany, the government recently decided that some minor applications to local governments must be answered within X days or else are automatically approved. I believe it was just a crazy idea that was submitted recently. The closest real thing is 75 VwGO which requires a decision in 3 months. The immigration office has been failing to meet that requirement for years with few consequences, because enforcing that right is expensive and takes even longer.

AnthonyMouse 9mo ago

> For example to make sure that a company can be held responsible when it breaks the law. In general this has nothing to do with incorporation documents. If a company unintentionally causes a large amount of damages, the company is going to get wiped out, but then you're just having the judge order the bank to transfer the company's assets to the victims. The owners of the company aren't particularly relevant except insofar as they now own a company whose value has been zeroed out, and they might be the ones to show up in court to argue against that being what should happen. If the people at a company intentionally cause a large amount of damages, the corporation is irrelevant. If your "corporation" is in the business of stealing catalytic converters and the police come to arrest you, the person with the sawzall in their hands is going to jail, and if that person was hired to do it they're going to be offered a deal to testify against the person who hired them etc. Pointing to your articles of incorporation at that point isn't going to save you. That isn't what LLCs do, actual criminal enterprises will frequently have not listed the true principals on the documents anyway, and the government is going to try to prosecute the perpetrators rather than the patsies on the documents. There is no real point in making this a burden for honest people. If they're honest then it doesn't matter. If they're not honest then you'd be a fool to trust what they wrote on a form anyway.

aaravchen 9mo ago
Is that actually how corporations work in the EU? Only having experience in the US, I can tell you conclusively that if the company states it's job is to make and promote poison for untrained people to spray everywhere, let's call it "CircleHeavenward" for example, and they successfully convince enough people to buy and use it, but then it's found they knowingly told people to spray it unsafely and knew it would kill millions of people but his it, and millions of the customers neighbors are now dying, absolutely nothing will be done. Because they're a successful corporation and therefore completely immune to any responsibility for any outright criminal activity. Doubly so it they can successfully claim more than one person was involved in carrying out that criminal activity, and therefore the responsibility for it is distributed.
- AnthonyMouse 9mo ago

danielfoster 9mo ago

This is admirable but the process in Germany right now is overly burdensome. It probably does weed out some bad actors (and good actors) not because of the documents required or any sort of checks performed, but because it takes months and costs thousands of euros.