What is the difference between the legal forms?
|Civil law partnership (GbR)||Limited partnership (KG)|
|Company name||The forename and last name of the members. It is allowed to use a name of your choice but only combined with a private name.||The name of at least one general partner with the KG complementary. As a supplement, you may indicate your name, the purpose of the company, but it is not mandatory.|
|Minimal capital||there is no legally stipulated minimal capital||there is no legally stipulated minimal capital|
|Liability||Basically, the members are liable for the debt of the company with their complete wealth, including their own private wealth regarding the partner.||The general partner of a limited partnership is personally liable with his/her private wealth.|
|Obligation of registration||At Trade Licensing Office (Gewerbeanmeldung)||At Trade Licensing Office (Gewerbeanmeldung)|
|Registration in the company register||None||Exists|
|Management||each member to the same extent (a different rule may be defined by the articles of association)||only general partners who are personally liable (a different rule may be defined by the articles of association)|
|Taxes||Local business tax, income tax (distributed by members)||Local business tax, income tax for the profit gained|
|Advantages||· possibility of establishment by several persons (min. 2, max. 5 persons)
· no obligation of registration
· no minimal capital
· each member has several common opportunity to make a decision
· there is no obligation of accounting, neither of preparing a balance sheet
|· wide capital base by the minority partners
· legal form that is favorable for family enterprises
· the management remains at the unlimited member
· High creditworthiness
|Disadvantages||· the complete liability of the members for the debts of the company, even with their private wealth
· the conflicts between the members may lead to the dissolution of the Civil law partnership (GbR)
|· completely unlimited liability of the general partners
· the conflicts between the general partners may risk the existence of the company
|Entrepreneurial company UG – Unternehmergesellschaft (haftungsbeschränkt), that is “Mini-GmbH”||Limited liability company (GmbH)||Registering of Limited liability company (Ltd.) in Germany|
|Company name||The name of the company completed with the entrepreneurial company (limited liability)||The name of the company completed with Ltd.||The name of the company completed with Ltd.|
|Minimal capital||The minimal capital is one Euro||The minimal capital is 25.000 Euro||The minimal capital is one GBP|
|Liability||The liability is limited to the assets of the company.||The liability is limited to the assets of the company.||The liability is limited to the assets of the company.|
|Obligation of registration||At Trade Licensing Office (Gewerbeanmeldung)||At Trade Licensing Office (Gewerbeanmeldung)||At Trade Licensing Office (Gewerbeanmeldung)|
|Registration in the company register||Yes||Exists||Exists|
|Management||Executive director||Executive director||Executive director|
|Taxes||Corporate tax and the local business tax||Corporate tax and the local business tax||Corporate tax and the local business tax|
|Advantages||· very low minimal capital
· In case of reaching a share capital of 25 000 Euros, it can be simply transformed into a “normal” Ltd.
|· separation of the company’s wealth from the private wealth of the members
· capital raise and entry of new members are possible
· possibility of a one-man Ltd.
· the articles of association regulate the legal disputes.
|· very low minimal capital
· the company establishment may be realized also online
· limited liability
|Disadvantages||· low share capital = high risk of insolvency
· in case of an entrepreneurial company, you cannot appoint more than one executive director.
|· share capital 25.000 Euro
· the duration of the company set up is 3-4 weeks
· the obligation of preparing a complete balance sheet, accounting and annual financial reports are relatively expensive: an amount between 3000 and 4000 Euros
· it is mandatory to have the articles of association certified by a notary.
|· administration costs through the registered office in England
· low share capital = high risk of insolvency
· English financial reports shall be submitted every year.
How long does the registering take in Germany, at the Trade Licensing Office (Gewerbeamt)?
The company registration takes place in a few minutes. It is a more important issue which documents are need for the registration at the Trade Licensing Office.
Can I establish a company if I do not live in the country of establishment?
Yes, you do not have to have a home address in Germany.
In case of setting up a company in abroad, do I have to be present in person?
- In case of establishing offshore companies, everything can be arranged in e-mail and by post.
- In case of establishing a Ltd. in England, you do not have to be present in person either. Our local partner settles everything for you.
- In case of setting up a capital company in Germany, Serbia or Switzerland, you have to be present in person before the notary only once.
What do I need in Germany for the business registration?
In case of personal companies, you must have a domicile in the country of establishment, and you will need your ID card or passport. Please consider that some activities are subject to an authorization.
Industry sectors that are subject to an authorization:
- Mortgage lending
- Guard/Protection services
- Auction house services
- Real estate agent, construction worker, builder
- Catering facilities
- Game rooms
- Travelling sectors (travel card)
Craft industry: There are industry sectors, which are subject to permission, and others are not, and there are industry sectors similar to the craft industry.
Please consider that the operation of a branch site or a non-individual representation must be declared to the competent authority.
Attention! The given industry sectors do not have to be registered at the Trade Licensing Office.
- socially useless activities, for example fortune-telling
- primary production, e.g. agricultural and forestry
- Liberal professions, e.g. doctors, lawyers, tax advisers
- all activity that suppose higher education, e.g. scientific corporate consulting
- own asset management
How long does it take to establish a capital company?
This vary by countries. The registering in the company register and the sending of the VAT number by the tax authority take the longest.