German bureaucracy is complicated. You know that. I know that. Blair St. Clair knows that. But here’s the good news – their processes are pretty standard. The challenge here actually is lack of concrete resources to guide us, expats, through the process. And language barrier (can’t wait for the day when this barrier stops existing in my life!).
To make the situation a little less dire, I am sharing my experience of registering a business partnership in Germany (Berlin, to be exact). I have added personal preferences/choices at the end of each point as I know that helps.
Note: This guide focuses solely on registering your business, and not what goes on before (such as business plan, deciding on a name, securing domain and social media channels, domestic business address for registration, etc) or after (like getting a steuernummer, supply chain, procurement, sales, etc).
Step 1: Decide on the legal form for your business
There are a few options out there, with two main contenders – GmbH and UG (haftungsbeschränkt).
- GmbH (Gesellschaft mit beschränkter Haftung/Limited Liability Company) requires an initial capital of 25.000€, whereas
- UG (Unternehmergesellschaft – haftungsbeschränkt/entrepreneurial company with limited liability) has no minimum initial capital limit (however a set percentage of your revenue needs to be invested back in the company).
UG is often considered a pitstop on your way to becoming a GmbH, and a choice for most startups with limited resources.
Personal Choice: UG – haftungsbeschränkt
Step 2: Find a Notar
If you are a sole trader, life is a lot easier when it comes to registration. Easier, and costs less. When you decide to establish a business partnership, it becomes a lengthier process because now there are two people with a stake in the business. And by law, you are required to have notarised articles of association, to be submitted to the Commercial Register at the Charlottenburg district court.
To find a notar, ask around for recommendations (like Facebook groups) and use Google search. Once you have shortlisted a few, call them to confirm availability (some can be too busy to take on new cases or give you a date 3 months from now) and decide on one.
Personal Choice: Notar und Rechtsanwalt Jens Michaelis, Mehringdamm 50, 10961 Berlin. +49 30 6883 6589
Step 3: Business Registration
Your Notar will request some information from you beforehand, in order to draft articles of association. It will include:
- Name of the company
- Overview of the company
- Domestic business address (which can be your residential address if your landlord allows it)
- Personal information of all the partners (name, surname, date of birth, place of residence, address, contact number)
- Share capital of each partner
- Decision on Musterprotokol (which is standard articles of association, with one managing director) or custom draft of articles of association (where terms of partnership are customised and there can be more than one managing director); Musterprotokol costs less than the custom version.
- Decision on translation services. If any of the partners are not fluent in German and do not wish to sign anything without understanding what they are agreeing to, it is recommended to request for translation.
Once you have provided all the details, you will get an appointment with your notary to sign and officiate the documents.
During the visit, you will be walked through the documents, can ask questions if something is unclear, double check names and spelling, and sign.
Costs: Notar fees, which includes translation as well, could be somewhere between 350-450€.
Step 4: Opening a bank account
Once signed, you are eligible to open your business bank account. Penta was the first choice but they do not accept Pakistani passports (as I was told during my video verification in July/August 2020). At the end, Commerzbank’s basic account seemed the most manageable choice.
Step 5: Entry in Commercial Register at the Charlottenburg district court.
Notar can only submit articles of association (AoA) once he has the proof that the capital committed in AoA has been deposited into the account. Once received, he will send the documents to Commercial Register, and send you the Registereintragung once the entry is successful. That document will also contain your Aktenzeichen (file number) and registration number (starting with HRB), latter being an important number for future documentation.
Handelsregister has a standard fee of 150€.
Note: You will receive A LOT of spam, asking for money under the pretence of Handelsregister. Some asking for more than 150, some asking for less; it is advisable to double check the invoice before paying.
Tadaaa..once you receive your Registereintragung, you are officially a registered business. Congratulations!
Next ocean to boil is registering with Finanzamt für Körperschaften I – IV and getting a tax number. That’s a guide for another day.
When registering Cherry Cross as a kleine unternehmen, I found some extremely helpful guides to assist me through the process – some were so detailed that they explained every single line in the form, and options of where I could find that information. To those content creators, I say THANK YOU. You truly are a unicorn.
This guide is an attempt to pass on the goodness, and maybe help someone like those guides helped me. Please note that I am not a professional startup consultant; this is based purely on my personal experience.