Founding a GmbH in 11 steps | Step-by-step guide

Summary

Starting a GmbH (limited liability company) in Germany involves a series of detailed steps. It begins with deciding on partners and a managing director, followed by creating a partnership agreement and notarizing it. Next, the company must be registered in the commercial register, a bank account opened, and initial capital deposited. Afterward, business and tax registrations are required, along with joining the Chamber of Commerce and other relevant authorities. Finally, you must register with the Transparency Register. The entire process typically takes 6-10 weeks, but it ensures a fully established and legally compliant GmbH, ready for operation.

Takeaways

• 😀 The first step to starting a GmbH is deciding on the partner(s) and managing director. The GmbH can have multiple partners, but the managing director handles its operations.
• 😀 A partnership agreement (statutes) is essential to form a GmbH. It should cover details like the company’s name, purpose, address, and share capital, with a minimum of 25,000 euros required.
• 😀 For simple GmbH formations, you can use a sample protocol to save on legal fees. However, if working with co-founders, it's best to hire a lawyer to draft a partnership agreement.
• 😀 A notary appointment is needed to certify the partnership agreement. This step also requires you to bring valid photo identification, and it can cost between 500 and 700 euros.
• 😀 After notarization, open a bank account for the GmbH and deposit at least half of the required capital (12,500 euros). Provide proof of this payment to the notary.
• 😀 Once capital is deposited, the notary registers the GmbH in the commercial register, which may take a few weeks. The cost of this step includes fees for the notary and the local court.
• 😀 You must then register your GmbH with the local trade office to obtain a business registration, similar to the process for a sole proprietorship.
• 😀 The GmbH must complete tax registration with the tax office, providing details like business purpose and sales expectations. You will receive a tax number necessary for invoicing.
• 😀 The GmbH is also required to register with the IHK (Chamber of Commerce) and pay annual contributions, unless exempt.
• 😀 Registration with the Federal Employment Agency is necessary to employ staff legally. This gives your GmbH a company number for hiring purposes.
• 😀 Lastly, register your GmbH with the Transparency Register to comply with anti-money laundering regulations, ensuring transparency about who owns the company.

Q & A

What is the first step in setting up a GmbH in Germany?

The first step is to decide who will be the partner(s) and who will be the managing director. The GmbH is a legal entity separate from its owners, and the roles of partner and managing director must be clearly defined.

How much capital is required to set up a GmbH?

A GmbH requires a minimum of €25,000 in share capital. However, you can contribute more capital if you wish. For example, you could set up a GmbH with €50,000 or even €6 million in capital.

Can I set up a GmbH on my own or do I need partners?

Yes, you can set up a GmbH on your own as a 100% shareholder and the managing director. Alternatively, you can have partners who own a percentage of the company.

What is a 'sample protocol' in the context of forming a GmbH?

A sample protocol is a template for creating a simple partnership agreement when setting up a GmbH on your own. This can save legal fees as it provides a standard format for a basic GmbH structure.

Why is it necessary to have a notary appointment during the GmbH formation process?

A notary appointment is required to notarize the partnership agreement, making it legally valid. The notary also verifies the personal details of the founders and ensures the agreement complies with the law.

How much does the notary appointment typically cost?

The notary appointment typically costs between €500 and €700. This fee includes the notarization of the partnership agreement.

What happens after the notary appointment in the GmbH formation process?

After the notary appointment, you must open a bank account for the GmbH and deposit at least half of the required share capital. Once the notary receives proof of payment, they will proceed with registering the GmbH in the commercial register.

Do I need to pay the full €25,000 capital upfront when starting a GmbH?

No, you only need to deposit half of the share capital initially. For example, if the total capital is €25,000, you only need to pay in €12,500 to start the process.

What is the commercial register, and why is it important for a GmbH?

The commercial register is an official registry where all companies in Germany are listed. Registering your GmbH in this register is a crucial step in making the company legally recognized.

What are the key registrations required once the GmbH is established?

After establishing the GmbH, you need to register with several authorities, including the local trade office (for business registration), the tax office (for tax registration), the Chamber of Commerce (IHK), the Federal Employment Agency, and the employers' liability insurance association.

What is the Transparency Register, and why must a GmbH register with it?

The Transparency Register is a legal requirement for all companies to disclose their beneficial owners. It is part of anti-money laundering regulations to provide transparency about who truly owns and controls the company.