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Preparing to Startup a Business
The following provides you with a general overview of the practicalities of starting up a business. However, we do recommend that you consult a lawyer or trustee for pertinent advice before formally establishing your business.
Obligation to Register
Someone who establishes a trading, manufacturing or any other type of commercial venture is obliged to register the head office in the register of companies. The obligation to register applies when you start operations. According to the company registration act in Germany, a business is an independent, commercial venture oriented towards permanent acquisition.
Company Name and Headquarters
The company must have a headquarters (address) when it is formed. This can consist of your own offices or it can be domiciled in the case of a lawyer or trustee. The name of the business needs to be queried and clarified with the authorities responsible. The chosen company name cannot be the same or similar to any other existing company. Define the articles of the company.
Amount of Share Capital (PLC) or Nominal Capital (Ltd)
The minimum capital depends on where the respective company office is located. Assets, such as non-cash assets, can also be transferred to the company on its formation. Open a capital deposit account at a recognised bank institute and pay in the capital. The account can also be opened by a lawyer or trustee. Determine the type of shares: either registered or bearer shares, select the representative members and specify the terms. Appoint an auditor if necessary
The Act of Formation
We differentiate between cash formation, which can be performed quickly and easily, and non-cash formation, which, as a rule, needs to be disclosed and proofed by the auditor. A public document is drafted by the notary. This document is issued by the certifying officer according to a process specified under law. The founding members need to prove their identity by presenting an official document in the form of a passport or ID card. Representatives also need to prove their identity and present an officially certified letter of authority. The founders present all the documents required for founding the company. The documents are checked and the founders are given the chance to read the articles of association again or have the certifying officer read them out loud. Finally, the founders sign the articles and the statutes. Ultimately, the certifying officer signs the articles himself and stamps them with a certifying stamp. The founders' meeting closes with this act. However, this does not mean that the company has finally been formed. On the contrary, the board of administration at the company now has the task of registering it in the register of companies, because only from this point onwards does the company have the right to call itself an entity and exists henceforth as a legal entity. The company to be registered with details of the firm, registered offices (political municipality) and address (number and road and town if applicable) is clearly to be identified on the registration form. For individual details, reference can be made to the enclosed documents and those to be presented on registration. The regsitration form needs to be signed by the president or vice-president and the secretary or a second member of the board of administration. Company signatures (business signatures with company name added) from all officers with the authority to sign (official signatories, administration board members, directors, authorised signatories etc.) also need to be added. The registration and company signatures need to be officially certified. Statutes as an integrating component of the official articles. Mandatory content: company, registered office, purpose of the company, share capital volume, capital invested ("payment for securities subscribed"), type, number and nominal value of the shares, convening of the general meeting, shareholders' right to vote, corporate bodies, notices. Confirmation of deposit at a recognised bank institute.
Domicile Acceptance Declaration
If the public limited company does not maintain its own offices, a written declaration by the holder of the domicile needs to be supplied confirming that he allows the company to have its domicile at the address stated.
A certified translation needs to be enclosed at all times with foreign language documents.
Non-Cash or Tangle Asset Take-Over Formations
Non-cash or tangle asset take-over contracts, take-over balance sheets, inventory lists, foundation report if any. Description of the objects to be brought into the company, description of the state of the objects, valuation, description of the valuation principles, audit confirmation from the auditor if applicable.
Registration in the Company Register at Company Headquarters’ Location
The company will be entered into the registry after the documents have been checked. As soon as registration has been confirmed, the company can start trading and start using the paid-in capital. The commercial register office automatically informs the tax authorities about the newly registered company. The tax office sends key documents for compiling tax-relevant data to the newly formed company. If an enterprise is formed as a "new" legal entity, the day on which the company is registered in the register of companies applies as the effective day from which liability to pay taxes applies for limited companies and cooperative societies. This can also apply when registration is delayed and business has been carried out in the name of the company prior to the company name the being registered, which is then taken over by the company after formation. In such cases, business transactions that took place prior to formation are also to be included in the basis for calculating tax.
The commercial register office informs the social security office after the company has been registered. This office then sends a form to the newly formed legally entity to clarify contributory obligations.
Accident insurance is obligatory in most countries. In certain sectors, it is mandatory for accident insurance to be taken up over the respective professional association. Insurance can be selected freely in all other cases.