Business start-up and business license

With the founding of a company primarily involves the following steps:

• registration with various authorities
• Applying for of permits
• Registration of responsible persons
• Proof of knowledge and resources

Legal forms

The legal form defines the legal framework within which a company operates and has legal, personal, tax and financial consequences.

There can be no company without a legal form. If no information on the legal form is available, the authorities assume that it is a sole proprietorship or, in the case of team formations, a partnership under civil law (GbR).

Not all legal forms are open to all professions. For example, tradespeople have different options to freelancers.

Almost all legal forms can be sorted into the following categories.

To sole proprietorship include

• registered traders
• small traders
• Freelancers or self-employed persons

To partnership belong:

• GbR - Company under civil law
• GENERAL PARTNERSHIP - General partnership
• PartG - Partner company
• LIMITED PARTNERSHIP - Limited partnership

To corporations include

• limited liability company - Limited liability company
• UG - Entrepreneurial company, limited liability
• PLC - Public limited company

Joint foundations can also take the legal form of a registered cooperative ( eG ) can also be considered. The most important difference between sole proprietorships or partnerships and corporations lies in the liability . In the first two legal forms, the shareholders are liable with their personal assets. personal assets . In the case of corporations, the liability of the shareholders remains limited to the contributions limited.

For the formation of a sole proprietorship or a partnership must no minimum capital be raised. The owner is also responsible for the management of the company. management of the company. The bureaucratic effort involved in founding and later in ongoing operations is relatively manageable for legal forms in these categories. manageable .

For corporations the shareholders usually have to make a minimum minimum contribution contribution. In the case of a GmbH, this is EUR 25,000. The overall bureaucratic effort is higher . For example, a notary must be consulted when the company is founded and a balance sheet must be prepared regularly at a later date. balance sheet be submitted. The management does not automatically lie with the owners of the company.

Non-governmental organizations
Non-governmental organizations (NGOs) can also be founded in almost any legal form. In most cases, however, NGOs choose to incorporate as:

• foundation
• non-profit registered association (e.V.)
• non-profit limited liability company (gGmbH)
• non-profit UG (gUG)

With a foundation a clear purpose and company assets are defined in advance. These are used exclusively for the fulfillment of the foundation's purpose purpose. A registered association is an association of at least seven natural and/or legal persons. Once entered in the register of associations, the NGO has full legal capacity as a legal entity. Here, too, the idealistic purpose in the foreground. If founded with start-up capital, the two legal forms are gGmbH and gUG are particularly interesting because they have clear limitations on liability.

Registration and notification obligations

Any planned, permanent self-employed activity carried out with the intention of making a profit is a trade . You must register this. The obligation to register applies regardless of whether the activity is carried out on a full-time or part-time basis. The takeover of an existing business or the opening of an additional branch must also be registered. Traders or business people include in particular

• Traders and retailers
• Restaurateurs and caterers
• Craftsmen and craftswomen

Registration with the trade office

As a trader, you must register your project with the relevant trade office register. The trade office then informs then informs all other authorities and institutions such as

• public order office
• employers' liability insurance association
• Chamber of Industry and Commerce
• Chamber of Crafts
• Local court (commercial register)
• the trade supervisory office, which is responsible for the occupational health and safety of employees and customers

To register with the trade office, you will need the following documents :

• valid identity card or passport
• depending on the activity (for example gastronomy), a permit or authorization
• craft card if a craft business is being set up
• Trade card for the establishment of a craft-like business
• Extract from the commercial register if the company is entered in the commercial register
• Residence permit which includes permission to carry out a self-employed commercial activity if the founder of the company is not a German citizen
• 10 to 40 EUR for the registration fee

In some cases a certificate of good conduct or information from the central trade register is required.

The type of commercial activity should be described as precisely as possible. The company name there are regulations. The processing of a business registration usually takes only a few days .

Tax office
Both freelance and commercial founders must inform their tax office within one month within one month of opening their business or commencing their activities.

The "questionnaire for tax registration" is electronically in accordance with § 138 paragraph 1b sentence 2 Fiscal Code (AO) must be submitted. Electronic questionnaires for tax registration and further information on transmission are available in the online tax office "My ELSTER" will be made available.

The electronic transmission obligation does not yet apply to the following formations:

• Corporation under foreign law
• association
• Other corporate body under private law within the meaning of Section 1 (1) numbers 4 and 5 Corporation Tax Act (KStG)

In these cases, you must complete the questionnaires of the Form Management System (FMS) of the Federal Finance Administration must be used.

In the questionnaire, you must provide information on future sales and profits, among other things. The information is important for the tax classification of the activity by the tax office. After completing the "Questionnaire for tax registration", you will receive the tax number by the tax office.

Obtaining permits and authorizations

You need an official permit and/or authorization for a whole range of self-employed activities. The Chamber of Industry and Commerce or Chamber of Crafts will inform you whether and which permits and licenses are required.

• In the retail trade for certain areas, for example certificates of competence are required.
• The transportation of persons is subject to authorization.
• Production companies for example, must obtain permits for their facilities.
• For start-ups in the catering industry, for example, they must have received instruction from the public health department.

Information on whether the premises and facilities comply with the legal requirements can be obtained from the relevant trade supervisory office. For rooms that were previously used for other purposes and are to be used as business premises in the future, a change of use must be approved by the responsible building authority is required. You should also coordinate the planning of commercial conversions and new buildings with the building authority in good time.

Registering employees
For the employment of staff, a company number from the Employment Agency is required. The application can be made by telephone, in writing, by fax or e-mail to the company number service.

Employees must also be registered with the statutory pension, health, long-term care and unemployment insurance schemes. In addition, the employers' liability insurance association must be informed about the establishment of the company (accident insurance).

Change legal form

In Germany, a company can change its legal form by changing its legal form. The conversion to a new legal form involves a considerable risk adverse legal and tax consequences. It should therefore be considered with the utmost care. Comprehensive advice on the options for action by a tax consultant is recommended. is recommended.

When changing legal form, the provisions of the Transformation Act (UmwG) are to be implemented. In particular, a detailed transformation report and a conversion resolution of the shareholders' meeting are required. In addition, the formation regulations for the desired company form must be complied with in accordance with the relevant laws must be complied with. The new legal form of the legal entity must then be filed for entry in the register in which the legal entity changing its legal form is entered.

There is no universal solution for converting a company into a different legal form. The procedure must be carefully considered on the basis of the specific circumstances. However, in order to rule out any risks, legal legal and tax advice is required. is required.

Business re-registration

A business must be re-registered for one of the following activities:

• Relocation of a business establishment within the jurisdiction of the municipal trade authority
• Change or expansion of the object of the business or trade to include goods or commercial services that are not customary in the business

The business re-registration takes place at the responsible trade office . You will need a valid identity card or an electronic residence permit (eAT) as well as a registration certificate. The registration certificate is required if the trader's place of residence is not also the place of business.

Deregistering a business
The business must be deregistered at:

• Complete cessation of a business
• Change of ownership while the business continues to exist, for example after sale, succession or lease
• Relocation of a business to the jurisdiction of another municipal trade authority
• Withdrawal of a partner in a partnership
• Change of legal form, for example from a sole proprietorship to a limited liability company
• Transformation in accordance with the UmwG, for example through a merger, demerger, change of legal form or transfer of assets

Business deregistration takes place at the responsible trade office . You will need a valid identity card or an electronic residence permit (eAT) for this.

• Tax code
• Corporation Tax Act
• Forms Management System (FMS) of the Federal Finance Administration
• Transformation Act (UmwG)