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Company Foundation: Costs, Process and Services at one Look

Oliver September 2020 4 min

Table of contents

If you want to start your own business in Germany, you need a meaningful business plan for your start-up. In addition, there are costs for setting up a company, for example for registration and authorities, which vary between 200 and 6,000 euros depending on the type of company. From the innovative idea to the first sales, creating a business budget, a high degree of initiative, some administrative skills and close contact with the authorities are required.

Pre-business Considerations

Before starting a business, the following should be taken into account:

  • What idea would you like to enter the business world with?
  • Which legal form suits your business idea?
  • How do you envisage financing your business idea?
  • Which contracts, rights and insurances have to be taken care of and concluded?
  • What equipment do you need, e.g. car, laptop, website etc.?

Important Tip:

Create a meaningful business plan for your business success!

This business plan ensures future personal success and answers the following questions:

  • Do you carry out your business activity as a sideline or main occupation?
  • How do you present your company on the Internet? What is your strategy for marketing and acquisition?
  • How do you protect yourself with insurance policies, for example, to prevent financial ruin?
  • What kind of health and pension insurance do you choose? Private or statutory?
  • What permits do you need to apply for?

Legal Forms of companies and costs of setting up a business

GmbH (LLC.)

  • Shareholder agreement and list: approx. 320 Euro
  • Commercial register application (HRB/HRA): approx. 100 Euro
  • Share capital: 25,000 euros

UG (Unternehmensgesellschaft, haftungsbeschränkt)

  • Input/capital stock: 1 Euro
  • Value of the object at foundation: approx. 30,000 euros
  • Commercial register entry (HRB/HRA): between 140 and 150 euros

AG (Aktiengesellschaft)

  • Share capital: at least 50,000 euros (25 percent paid in cash)
  • Duration of the foundation: approx. 2 months
  • Foundation costs: approx. 6,000 euros
  • Annual costs: approx. 6,500 euros

Sole proprietorship

  • Share capital: 0 Euro
  • Foundation costs: 50 to 100 Euro

The right Legal Form for your business formation

Regardless of which legal form you choose, all company foundations have one thing in common: the tax data collection of figures, facts and turnover. In addition, registration with the employers’ liability insurance association is mandatory in Germany.

Depending on the type of company, it may be necessary to register a trade, enter it in the commercial register or apply for a company number. The preparation of the annual income and transition account must be submitted to the responsible tax office in good time and in full.

If you don’t know enough about accounting yourself, have the documents for the tax office prepared by a recognised tax office. The accuracy and timely submission of the documents and tax returns to the tax office should always have top priority. Due payments and advance payments must always be made on time. It is therefore better to plan a little more time for the tax part. For example, you will need a notarial deed for the foundation of a UG, if you want to register a catering trade, a restaurant permit is necessary.

A well thought-out start in the foundation of your company

Setting up a company in Germany always involves financial costs which must be carefully considered and taken into account from the outset. How high the costs of setting up a company actually amount to depends on the one hand on the type of company chosen and on the other hand on the individual personal requirements of the owner.

However, all founders have one thing in common:

At the beginning, investments are necessary in order to generate quick and sustainable income and to constantly optimise the company. In addition, the company must not have liquidity problems. Therefore, make sure that sufficient equity capital or a loan is available at the beginning for the start-up phase of the company. For small and medium-sized companies, the sole proprietorship is the ideal way to start up a business.

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