Establishment of GmbH
GmbH has a minimum capital of € 25.000,00. A quarter of the nominal capital, but at least 12.500,00 EUR must be paid when the company is established and before the application for registration in the commercial register is submitted. If GmbH gründen has only one partner who also serves as a board member, he must provide a guarantee for the unpaid balance.
In November 2008, a new kind of baby-sized GmbH was introduced. Called Unternehmergesellschaft (haftungsbeschraenkt) or UG (haftungsbeschraenkt), it initially operates with equity capital of € 1,00-24.999. However, partners of such operating companies with limited liability are obliged to invest a quarter of the company’s future annual profits in capital reserves until they reach the statutory minimum share capital of 25.000 euros.
Company agreements are subject to notary records. The notary also manages the application for registration of the company in the commercial register for the partner. However, a notary’s record if the partner chooses the standard set of provisions stipulated by law in the articles of incorporation. This set specifies only the minimum required for entry into the company’s registry.
In that case, the cost of establishing GmbH depends on the nominal capital. For GmbH with a minimum capital of € 25.000. The costs are as follows:
-168 euros; notarized draft of the company charter
-168 euros; for notarized records of the first general meeting (not really required)
-42 euros; entry into the register, published in the Gazette
-100 euros; published in the official bulletin
Notary establishment of the company’s articles of incorporation also requires the involvement of a sworn translator unless the founder waives this requirement. The exemption is only accepted by a civil notary public if the founder is otherwise guaranteed to have adequate knowledge of the company’s articles of incorporation.
Implementation of GmbH
The start of business should be reported to the local Department of Trade and Industry. Immediately notify the tax office and send a survey to the employer to obtain the data needed for taxation. Questions refer to data that is of particular importance to taxation, from general information such as industry, address, and banking data. Whether the business is subject to VAT due to the size of the business, or whether the tax office needs to assess the income tax, corporate tax, and business tax prepayment. If a cross-border business is planned, the employer can apply for a trade ID. You must fill out the questionnaire and return it to the tax office within one month.
GmbH must maintain proper and orderly accounting in the form of double-entry bookkeeping, regardless of size. You must also prepare an annual report consisting of at least a balance sheet, accounting description, and income statement within three months of the start of the new fiscal year. For smaller GmbHs, this period will be extended to 6 months. The annual report must be submitted to the commercial register for publication.
The German Ministry of Economy and Technology provides an English online service for foreigners who want to start a business in Germany. This step-by-step portal lists start-up procedures, business planning strategies, and management techniques to ensure your company’s success. You can also apply for state assistance, but generally you need at least one year of previous employment in the country to be eligible for assistance.
