Starting a Business in Berlin

28 29 Starting a Business in Berlin A Beginner’s Guide Registered commercial trader (e.K.) The registered commercial trader is a sole proprietorship that is entered in the Commercial Register. The registered commercial trader runs the business on his own and inde- pendently, however he can engage employees. Profile of an e.K. ls Suitable for an entrepreneur working alone ls No minimum capital required ls listing in the Commercial Register required ls Unlimited liability of the owner (i.e. including private as- sets) vis-à-vis the company’s creditors ls A company name in the legal sense can be used ls Notification of the regulatory agency (Ordnungsamt) is mandatory and, if required, a licence must be obtained Partnership constituted under civil law (GbR) A GbR is the simplest form of start-up where a team of people is involved. It forms automatically when individuals collaborate to pursue the same commercial goal, for instance by prepa- ring a business plan in order to go into business together. Although a written partnership agreement isn’t essential, it is a good idea for you and your partners to draw one up. Otherwise, the provisions of the German Civil Code (BGB) will apply automatically, which is why this legal form is also known as a BGB-company. As far as the management of the GbR is concerned, the BGB states that all of the partners should make decisions together and should also represent the company jointly vis-à-vis third parties. This means that all of the part- ners must act as one to conclude every legal transaction. Since this can prove inconvenient in practice, the partners are able to make alternative internal arrangements in their partnership agreement (for example, they may appoint a single partner to requirements of the German Commercial Code and must, for instance, notify their suppliers immediately if they receive faulty goods, so as to retain their right to make warranty claims. A SELECTION OF LEGAL FORMS AND THEIR SPECIAL FEATURES Sole proprietorship This is by far the most common legal form in Germany, and is very easy to set up. A sole proprietorship exists from the time you start work, if you have not chosen another legal form, and if you are starting up alone. The sole proprietors- hip is managed solely and independently by its owner, but of course staff can still be recruited. Profile of a sole proprietorship ls Suitable for an entrepreneur working alone ls No minimum capital required ls No listing in the Commercial Register required ls Unlimited liability of the owner (i.e. including private assets) vis-à-vis the company’s creditors ls No company name in the legal sense (the first name and surname of the owner must be given in the company designation) ls Notification of the regulatory agency (Ordnungsamt) is mandatory and, if required, a licence must be obtained FAQ about Company Law  ihk-berlin.de/ company-law CHAPTER 3