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| ▲ | AnthonyMouse an hour ago | parent | next [-] | | > For example to make sure that a company can be held responsible when it breaks the law. In general this has nothing to do with incorporation documents. If a company unintentionally causes a large amount of damages, the company is going to get wiped out, but then you're just having the judge order the bank to transfer the company's assets to the victims. The owners of the company aren't particularly relevant except insofar as they now own a company whose value has been zeroed out, and they might be the ones to show up in court to argue against that being what should happen. If the people at a company intentionally cause a large amount of damages, the corporation is irrelevant. If your "corporation" is in the business of stealing catalytic converters and the police come to arrest you, the person with the sawzall in their hands is going to jail, and if that person was hired to do it they're going to be offered a deal to testify against the person who hired them etc. Pointing to your articles of incorporation at that point isn't going to save you. That isn't what LLCs do, actual criminal enterprises will frequently have not listed the true principals on the documents anyway, and the government is going to try to prosecute the perpetrators rather than the patsies on the documents. There is no real point in making this a burden for honest people. If they're honest then it doesn't matter. If they're not honest then you'd be a fool to trust what they wrote on a form anyway. | |
| ▲ | direwolf20 6 hours ago | parent | prev | next [-] | | > For example to make sure that a company can be held responsible when it breaks the law. This is the reason Germany hates small companies. Germany wants you to be a sole trader with no liability shield. Some people hack the system by registering a company in another EU state such as Lithuania. | | |
| ▲ | erispoe 5 hours ago | parent | next [-] | | That's not a hack, if you operate the entity from Germany, it must be registered in Germany. It's often touted as a tax loophole, but it's not. Tax authorities do not care about you unless you actually make money, then they will come after you. | | |
| ▲ | jkaplowitz 2 hours ago | parent | next [-] | | Would the liability shield not generally apply to a foreign entity registered in Germany? Sure there may be special rules for non-compliance with specific tax obligations, but I'm talking about for general liability for other purposes, like a contract signed by the entity where no personal guarantee was given, or a harm caused by the corporation where the owner was not personally involved or negligent in causing the harm. | |
| ▲ | direwolf20 4 hours ago | parent | prev [-] | | Which law says it must be registered in Germany? | | |
| ▲ | johannes1234321 3 hours ago | parent [-] | | It must be seated where the business happens for compliance with tax laws. But you may have a French S.a.r.l. in Germany and thus fall under their company law (with impact on publication responsibilities, company governance etc.) While for some cases there is room for abuse (like Amazon Kindle eBooks are sold to Germany by a company situated in Luxembourg, while only selling via amazon.de to audience with German residency) However my employer is a Dutch B.V. with headquarters in Germany, thus they avoid having to form a board with works council representatives as a German GmbH (or AG) of comparable size would require. | | |
| ▲ | jkaplowitz 2 hours ago | parent [-] | | Specifically, it must be seated where the principal management of the business occurs. So if the executives and board meetings and books and records are strategically located in one country and most of the business operations are in a second, it's valid and probably even required for the business to have its tax residence in the first country rather than the second. It may very well have a permanent establishment and therefore some tax obligations in the second country, but that's different from the second country being the primary tax residence. |
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| ▲ | 26 minutes ago | parent | prev [-] | | [deleted] |
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| ▲ | egorfine 6 hours ago | parent | prev | next [-] | | There is a huge spectrum between "require impossible documentation" and "require none". Germany and EU are heading towards the former. | | |
| ▲ | Bewelge 6 hours ago | parent | next [-] | | German here. That's not true. What crazy documentation do you require? An ID, proof of residence, and a business plan?
(edit: you don't even need a business plan) That being said, everything about the process is annoying and you always have the feeling that you're doing something wrong or forgetting something. Together with some ridiculously slow processing times, it's the perfect combination to frustrate you and I'm sure it ultimately reduces innovation. But in reality, getting all the paperwork together is probably a couple of hours of work. You can buy services that do it for you for a couple of hundred Euros. | | |
| ▲ | ExoticPearTree 5 hours ago | parent | next [-] | | > ... and a business plan? Why would the government need a business plan? It's none of their business what you want to do with your company besides a general description as "software development" or "consulting services" or whatever. | | |
| ▲ | logifail 3 hours ago | parent | next [-] | | > It's none of their business what you want to do with your company There are plenty of European member states that want the ability to control very precisely what you do with "your company". You want to call yourself "a software engineer"? Ooops... In the EU it seems particularly the German-speaking countries are borderline obsessed with a) titles, and b) whom may use those titles. See, for instance, https://news.ycombinator.com/item?id=34096464 | | |
| ▲ | petre 16 minutes ago | parent [-] | | > a) titles, and b) whom may use those titles We had a German acquaintance who has registered with the bank here as Dr. Jane Doe and ran into issues because Dr. appeared nowhere on her ID. The funny part is that she emigrated from Eastern Europe during her 30s, but was somehow brainwashed by German culture. Whenever I see someone obsessively listing their title I'm reminded of her story. |
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| ▲ | Bewelge 4 hours ago | parent | prev | next [-] | | Actually I think I might be mistaken that you are even required to make a business plan. It's listed as one of the steps on the states portal about founding. But it goes on to say that it's not technically required, just highlights its importance. https://www.existenzgruendungsportal.de/Navigation/DE/So-geh... | |
| ▲ | dpc050505 2 hours ago | parent | prev [-] | | Several sectors of economic activities have the potential for atrocious externalities and it's absolutely the government's business to know about these and make sure that you're following regulation to minimize these externalities. When you make your employees the neighbours sick (or straight up kill them) it's an enormous failure on the part of government. It's easy to be oblivious to that when you only think about software. Exhibit A: https://www.ctvnews.ca/montreal/article/battery-facility-acc... | | |
| ▲ | logifail an hour ago | parent [-] | | Except it seems that it's often large companies - typically those with lots of lawyers - who seem to get away with what I can only describe as "corporate misdeads" most regularly. "Following regulation" sounds great until it's revealed that corporate lobbyists have been helping (co-)write regulations to make sure that fair competition is quashed. |
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| ▲ | jagrsw 6 hours ago | parent | prev | next [-] | | I don't know much about corporations, but why business plans are needed at all? I mean, for EU citizens. bank (loans), immigration and investors can be interested, but their interests are not covering every corporation out there. | | |
| ▲ | Xylakant 3 hours ago | parent | next [-] | | There’s absolutely no need to have a business plan to start a company in Germany. You articles of incorporation and they state a company purpose, but this can be something as simple as “do IT consulting”. Obviously, having a credible plan helps if you try to convince banks to loan you money or any such thing, but the act of registering a company requires no such thing. | |
| ▲ | embedding-shape 5 hours ago | parent | prev [-] | | It's basically a proof of "most basic effort" that you're serious. You could probably note down some stuff on a single A4 and get it approved, it doesn't have to be a 40 page dossier. Kind of like fizzbuzz, just something really simple and most basic to get rid of the "easy scams" and so on. Edit: So "easy scams" are probably the wrong word, I initially wrote "riffraff" because in my mothertoungue that isn't so... disparaging, but what I meant was that it's used as "bare minimum filter" basically. | | |
| ▲ | zdragnar 5 hours ago | parent | next [-] | | That doesn't really sound like a barrier to the easy scams at all. It just sounds like something someone once thought would be a good idea and now everyone has to do it because that's the process. | |
| ▲ | philipallstar 5 hours ago | parent | prev | next [-] | | How would this get rid of easy scams? | |
| ▲ | whatevaa 4 hours ago | parent | prev [-] | | ChatGPT, give me a convincing sounding business plans for starting a bussiness in Germany. Done. |
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| ▲ | petre 24 minutes ago | parent | prev | next [-] | | Previous HN discussion about aetting up a GmbH. https://news.ycombinator.com/item?id=39959368 | |
| ▲ | 28 minutes ago | parent | prev | next [-] | | [deleted] | |
| ▲ | dcrazy 3 hours ago | parent | prev [-] | | > business plan This is the problem. Let me pivot. Let me fail. Let my investors (including myself) lose time and money in bad ideas. All the bureaucracy in the world didn’t stop Wirecard, but it sure as heck demotivated people from trying something new in Germany. | | |
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| ▲ | embedding-shape 6 hours ago | parent | prev [-] | | Literally the whole effort this submission, is about is moving a tiny step towards "require none" but not go all the way, compared to how it is today. You chose the wrong submission to comment that on, in any "new regulation in EU" submission that might have been appropriate, but this move is quite the opposite of what you say is happening. | | |
| ▲ | egorfine 6 hours ago | parent | next [-] | | > this move My point is that this move will not happen. I don't believe EU can overcome a huge and extremely motivated army of bureaucrats. | |
| ▲ | philipallstar 5 hours ago | parent | prev [-] | | This isn't an EU move, is it? | | |
| ▲ | embedding-shape 5 hours ago | parent [-] | | > This isn't an EU move, is it? What, exactly, do you mean with "EU move"? I guess technically it's a "European Commission" move, but overall it's a European and EU move, unless "move" has some specific meaning to you. |
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| ▲ | nicbou 4 hours ago | parent | prev | next [-] | | > In Germany, the government recently decided that some minor applications to local governments must be answered within X days or else are automatically approved. I believe it was just a crazy idea that was submitted recently. The closest real thing is 75 VwGO which requires a decision in 3 months. The immigration office has been failing to meet that requirement for years with few consequences, because enforcing that right is expensive and takes even longer. | |
| ▲ | amluto 5 hours ago | parent | prev [-] | | In most (all?) US states, you can just start a company. You file a form, usually online, with the state, and you ask the IRS, online, for an ID number called an EIN. Technically you have a valid company after just step 1, but good luck getting any sort of bank account without doing step 2. If you want to employ people, you need to file gratuitously obnoxious paperwork, but it’s still automatic. What’s the actual problem? Why should it be harder? Some states like California dislike small businesses in that they charge $800/year. But that’s pretty much it. |
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