Germany

• Legal entities under private law (limited liability companies, corporations and associations, foundations and institutions, public limited companies, cooperatives, registered associations)
• Legal entities under public law (foundations and institutions, corporations of the federal states, the municipalities and the federal government, universities).

• Civil Law Code (Bürgerliches Gesetzbuch – BGB) especially: associations §§ 21 ff. BGB and civil law partnership §§ 705 ff. BGB
• Commercial Code (Handelsgesetzbuch – HGB)
• Limited Liability Company Act (Gesetz betreffend Gesellschaften mit beschränkter Haftung – GmbHG)
• Stock Corporation Act (Aktiengesellschaft – AktG)
• Cooperative Society Act (Gesetz betreffend die Erwerbs- und Wirtschaftsgenossenschaften – GenG)
• Partnership company Act (Partnerschaftsgesellschaftsgesetz – PartGG)

• Registration procedure

Drawings of signatures under the articles of incorporation intended for safekeeping at the court must be certified by a notary public before submission to the commercial register. The documents are transmitted in electronic form to the register court and checked there. If there are no objections, the court enters the relevant data into the register.

• there is an economic and/or regional interest in the business idea;
• the business idea is expected to have a positive impact on the local economy;
• financing is secured by equity capital, subsidies or a valid loan commitment.

Differences between a residence permit and a settlement permit:
Foreign entrepreneurs who want to start a business in Germany initially receive a temporary residence permit that is valid for up to three years. If the business is successful, an unlimited settlement permit can be applied for after the three years have expired. Those who have been in possession of a residence permit for five years usually also receive an unlimited settlement permit.
Step 2: Choose a suitable legal form and, if necessary, conclude the articles of association
Step 3: Register a trade and enter the company in the commercial register
Trade register (Gewerberegister)
Before starting a business, every entrepreneur must register his or her trade with the trade or public order office of the respective city or district.
Afterwards, the entrepreneur usually automatically receives a questionnaire from the tax office for tax registration.
Commercial register (Handelsregister)
An entry in the commercial register is mandatory for the following legal forms:

• General partnership (OHG)
• Limited partnership (KG)
• Limited liability company (GmbH)
• Public limited company (AG)

Activity of foreign legal entities in Germany
Foreign legal entities may set up branches and dependent branches or establish subsidiaries in Germany. When establishing a branch or a subsidiary, the company’s name must be registered with the commercial register. EU/EEA companies may be transferred to Germany in the course of the EU freedom of establishment. A company founded in another EU country may fully carry out its business activities through a branch in Germany.

• Responsibility for the proper organisation of the company (e.g. by preparing the annual financial statements, safeguarding the share capital against prohibited disbursements, etc.)
• Control of the observance of general and special regulations (compliance)
• Duty of loyalty (avoiding conflicts of interest, non-competition during the term of office, etc.)
• Convening and possibly participating in the shareholders’ meeting
• Constant monitoring of liquidity and indebtedness as well as ensuring proper accounting
• Careful written documentation of the GmbH’s activities
• Risk management
• Employee protection
• Duty to file for insolvency

There are 2 kinds of liabilities:

• Internal liability of a managing director towards the company and the shareholders:
  • If he does not observe the above principles, the company may claim damages against him.
• External liability of a managing director towards third parties:
  • Personal liability of a director
    • in case of infringement
    • in tax law
    • in social security law
    • in representation of the company
    • in case of insolvency

• being 18 years old
• having a current account with a bank

• declaration of compliance with the German Corporate Governance Code,
• description of the relevant information on corporate governance practices that go beyond the legal requirements, such as ethical standards, labour standards, social standards or guidelines on compliance or sustainability,
• description of the functioning of the executive board and the supervisory board as well as the composition and functioning of their committees. Here, a reference to the internet is possible, provided that the information is publicly available there.

For companies in which the federal government holds a majority share, a minimum participation of one woman on boards with more than two members has been introduced.
For supervisory boards of companies listed on the stock exchange and subject to parity co-determination, a gender proportion of 30 per cent has applied since 2016.
The General Equal Treatment Act aims to “prevent and eliminate discrimination on grounds of race or ethnic origin, gender, religion or belief, disability, age or sexual identity”.

• Income taxes
  • Income tax between 14-45%
  • Corporate income tax depend on the size of your company and your annual turnover
  • Trade tax 3.5% base rate
• Value added tax normally 19%
• Substances tax (houses or land)

• Company register for GbR
• 3 forms of GbR

In the course of implementing the EU Company Law Package, simplifications for companies and more uniform rules in company law across all EU states are to follow. The Digitalisation Directive will make it possible to form companies online in the future. Within the framework of the Mobility Directive, there are to be special, uniform regulations for European corporations for cross-border changes of legal form and cross-border demergers for the purpose of new formation.

• Bridging aid
• Kreditanstalt für Wiederaufbau offer loans with lower interest rates and simplified risk assessment
• Economic stabilisation fund (Wirtschaftsstabilisierungsfonds)
• Guarantees (Bürgschaften)
• Tax aid measures: deferment of tax payments, adjustment and refund of advance payments, support for start-ups, short-time allowance