Company Registration in Germany

Germany is the economic powerhouse of the Jutland peninsula. It is the largest and most powerful nation in the European Union. The German Government has always taken the initiative for SMEs, i.e., Small and Medium Enterprises, to mark up considerable developments in the Deutsch mainland. In Germany, these SMEs are also termed the Mittlestand. The benefits and incentives the German Government offers aid these SME enterprises to function effortlessly in their respective ministries.

Furthermore, the German Government is supportive of providing the required training to all its registered businesses for carrying out varied commercial activities. Germany considers its SMEs to be the backbone of its highly developed nation. They understand the language of Business and its importance in the process of nation-building. Therefore, the Germany Authorities have enabled the Company Registration procedure to be very easy and business-friendly for budding entrepreneurs as well as investors.

Germany Commercial Register

If someone is about to start a business in Germany, It is necessary to complying with various legal requirements and Germany Commercial Registry is one of them. This kind of registry plays a vital role in providing transparency and legal certainty for any business.

The Germany Local courts maintain a public register which is the germany commercial register. It is identified  as central repository of business related information,such as their legal structure, ownership, financial statements, and other relevant details. The Federal Ministry of Justice and Consumer Protection operates the German commercial registry and ensure the accuracy and integrity of the information and details which contained in commercial register.

Benefits of Company Registration in Germany

Since we have mentioned much about Germany and its corporate environment, let us look at some of the benefits of registering a company in Germany in detail.

1. German Authority is very transparent in their conduct

Germany offers the most transparent legal procedures of all the western Europe countries when it comes to running businesses. For foreign investors, the process of company registration is quite straightforward in Germany. In addition, the German Government offers a lot of support to business enterprises in terms of incentives and subsidies.

2. Germany offers world-class Infrastructure to Startups

The Deutsh Land offers world-class infrastructural facilities to budding businesses. Businesses run effectively if commercial productions are conducted in a seamless manner. This can be enabled with a well-built and well-supplied infrastructure. The state-of-the-art telecommunications system of Germany enables business enterprises to run themselves effectively in the Deutsch environment. The German Infrastructure also offers high-speed transport facilities, such as railways, cargo, road networks, trams, etc., along with other multitudes of infrastructure facilities.

3. Germany ranks among the least corrupt nations in the world

Germany consistently ranks as one of the least corrupt nations around the globe. As per the Transparency Index Report of 2018, Germany is in the eighth position in the world for the least amount of corruption in official proceedings and government-working.

4. Germany puts no control on Foreign Investment exchanges

Germany does not exercise any form of exchange control for foreign investment opportunities. Therefore, any number of foreign organizations can invest in businesses registered in Germany.

Corporate Structures in German Commercial Registry

Before you start with the company registration procedure, you must know the eligible business structures that can be incorporated with the Corporate Authority of Germany.

It is crucial for you to choose the type of business structure appropriate for company registration in Germany. Therefore, we have detailed the eligibility for every recognized business structure in Germany.  

1. Limited Liability Company

• The Limited Liability Company, or LLC, is a registered business entity in Germany.
• Every recognized LLC must maintain a minimum of one investor.
• The minimum share capital requirement for LLC incorporation in Germany is 25,000 EUR.
• An LLC is termed a GmbH in the German language.
• A GmBH does not allow the transfer of company shares to the public
• A GmBH cannot be registered at any of the Stock Markets in Germany.
• The Director of a GmBH is appointed through the general meeting of the shareholders.
• The appointed Directors take all the day-to-day decisions of a German LLC.

2. Joint Stock Company

• A Joint Stock Company is a type of business entity best suited for large businesses.
• A Joint Stock Company or a JSC must maintain a minimum share capital of 50,000 EUR.
• A JSC is termed as AG in german language.
• A court or Notary must verify the draft of the Articles of Association of a JSC.
• If a JSC is noted in the commercial register, it becomes a legal entity. 

3. German Limited Partnership

• In this type of Partnership, the Business provides for a limitation of liability by having two types of partners.
• The first partner or the general partner has unlimited liability.
• This liability extends only to the member partner's personal assets.
• The second partner, or the limited partner, is the one whose liability extends only to their nominal holdings in the Partnership arrangement.

4. Sole Trader

• In this entity model, only a single individual is required to run a Business.
• Shops and small establishments usually adopt such a business model.
• Not many regulations are mentioned for such a trivial business model.
• It is ideal for single ownership of businesses in Germany. 

5. Branch Office

• Branch registration is one of the popular methods foreign establishments adopt to enter the German market.
• Branch Office is not a separate legal entity.
• It depends on the head office or the parent company that instructs its operations.
• The parent company is in charge of central administration, whereas a Branch Office serves the local purposes of the Company, such as business expansion in the market.

Documents Required for Company Registration in Germany

Every company incorporation aspirant must draft and compile the following documents that must be submitted along with the company registration application:

Document 1 : Duly-filled application for Company Registration

Document 2 : Certified or notarized Articles of Association of the proposed Company

Document 3 : Details of the management board structure of the Company

Document 4 : Certificate proofing the share capital deposition records

Document 5 : Visas of Director(s) in case he or she is a foreign resident

Document 6 : Registered Official Address of the proposed Company

Document 7 : Complete details of the Shareholders  as well as Directors of the Company

Document 8 :  Any other information as requested by the Authority

Process of Company Registration in Germany

Every company incorporation applicant must conform to the following procedure to register its Business with the German Authority:

Let us look at steps in detail one by one.

Step 1 : Choose the appropriate Business Structure for the Company

As we have described the different business structures available in Germany, the applicant must choose the appropriate business structure to register with the Germany Corporate Authority. The most common business structure adopted by foreign investors is LLC or Limited Liability Company. But such a business requires a minimum of EUR 25,000 as its share capital requirement. Therefore, the applicant can accordingly adopt other business structures requiring lesser capital in Germany. Also, the applicant must choose a business structure as per the nature of the business activities it intends to undertake.

Step 2 :  Choose and Reserve the appropriate Trade Name for the Company

• • The next step is to choose an appropriate trade name for the Company.
  • The applicant must get the chosen name checked with the commercial register or the Handelsregister in german.=
  • If the name is already taken, then you must choose a different unique name.
  • Also, the chosen name must not infringe on an already registered business.

Step 3 : Formulate the Company Deed to present to the Authority

Further, the applicant must formulate the Deed of the company formation. The Deed or agreement must be drafted as well as executed before a Notary. The Company founders must provide the following to the Authorities with their specimen signatures:

• • Article of Association
  • Proof of Identity of the Directors

Step 4 : Register for a Corporate Bank Account for the Company

• • There are various forms of notaries in Germany.
  • Each of these notaries has different forms of jurisdiction.
  • These Notaries are very particular about in which Bank the corporate Account must be opened.
  • It is imperative for the Company to find a bank that is present in the list of accepted financial institutions by the Notary.

Step 5 : Stammkapital: Deposit the requisite capital in the Account

After opening the bank account, the applicant must deposit a certain amount of capital for the process of company formation. In this regard, the applicant can put the Stammkapital number for reference. Once the deposition takes place, the company registration applicant must also ensure that the deposit receipt is sent to the Notary to make it official.

Step 6 :  Paying the Notary to execute the Invoice

• • Afterwards, the applicant must make a payment to the Notary.
  • The applicant must execute the payment of the Handelsregister invoice.
  • However, this step is redundant if the Notary has carried out the step.
  • Notary will notify the applicant after the formality of Company Registration in Germany.
  • Once the Authority incorporates the Company, the Notary will issue a notification.
  • Hence, the Company will be officially entered into the commercial register of the German Authority.

Step 7 : Obtain the required Licenses for running Business

The applicant must, As per the type of commercial activity undertaken, must arrange for or apply for specific licenses or permit from the German Authorities. Without the requisite permits, the Business cannot operate entirely in the German market.

Post-Incorporation Compliances

Setting up a business does not finish with its incorporation within the Commercial Register in Germany. Every newly registered Company in Germany must conform to the stipulated compliances as per the directions of the German Authority.

Heed the following compliances that must be conformed to after the due procedure of company registration in Germany.

Annual Accounts

• The incorporated Business must hold shareholder meetings a minimum of once a year.
• The meeting must decide on the annual accounts of the Company.
• As per the Commercial Law of Germany, every Company must file annual accounts with the Bundesanzeiger, i.e., the German Federal Gazette.

Annual Board Meetings

The annual board meetings with the Company directors and shareholders must be held as per the Articles of Association of the Company.

Corporate Bank Account

Every registered business entity in Germany must undertake the task of opening a bank account in Germany after its registration with the Authority. Germany boasts of one of the best international banking facilities in the world.

Annual Tax Returns

• The incorporated Business must periodically file income tax returns at least once a year with the competent German Tax Authorities.
• Each Company in Germany are taxed in two forms, namely:
  • Corporate Tax, also known as Körperschaftsteuer
  • Trade Tax, also known as Gewerbesteuer
• The local municipalities levy the Trade Tax on the Company.
• Corporate Tax is charged at the rate of 15.825% by the Federal Authority.

Our Assistance for Company Registration in Germany

Our Incorporation experts provide you end to end company incorporation services in Germany by assisting you in the following manner:

• Collecting and Organizing the requisite Documents
• Compiling the necessary documents for registration
• Reserving the chosen name with the German Authority
• File the certification application for Company's Incorporation on your behalf
• Appoint Directors and Shareholders for your Firm
• Prepare the requisite Articles of Association for the Corporation
• Assist in the appointment of the directors and shareholders in the Company
• Choosing the appropriate office location for the Company
• Obtain the required business licenses for running the Company in Germany

We ensure that your company incorporation services requirements for Germany are always on time. Our professionals understand the intricacies of company incorporation procedures in Germany. Thus, we have expedited the process – helping you incorporate your Company at an affordable price.

So, reach out to our Incorporation Experts and realize your dream of starting your own Company in Germany.

FAQs

Q.1 What is the meaning of GmbH?

In German language, the GmbH is an abbreviation for “Gesellschaft mit beschränkter Haftung.” Its meaning is “company with limited liability.”

Q.2 What is HRB number in germany?

The HRB is for an incorporated company (Kapitalgesellschaft) and corporations are listed under HRB and other companies such as partnerships.

Q.3 Can I change the business structure after registration?

Yes, you can change the structure of your business after registration through a legal form. By changing a company's legal format, the legal identity of your company will not change. Previous shareholders will remain the same and also no shares or assets will be transferred from the company to another one.

Q.4 Do I need a physical office in Germany to register my company?

Yes, a local registered office address is required to register a company in Germany. While submitting the application, the owner must have an actual office address where the company is operated.