Current Posts

Freedom of Establishment in the EU as the Basis for LTD in Germany

Firmengruendung.de 0 4067

One of the fundamental ideas of the European Union is the freedom of movement for its citizens. Thus, a German can live and work under facilitated conditions in France, Spain, or the UK just as an Italian, Portuguese, or Greek can.

However, this freedom of movement extends not only to natural persons (i.e., individuals) but also to legal entities (e.g., corporations). This is upheld by the European Court of Justice, and since the confirming decision on March 13, 2003, also by the German Federal Court of Justice (BGH).

This means that a German GmbH can operate freely in any member state without losing its legal capacity. Naturally, corporations from other EU countries enjoy the same protection in Germany.

Therefore, German entrepreneurs have the opportunity to operate in Germany with a properly established corporation from another EU neighboring country.

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Why set up a Ltd.??

Firmengruendung.de 0 4051

The Limited can be established within 24 hours and is immediately capable of limited liability operations. This means that even without a German commercial register entry, the English liability protection applies. A share capital of just 1.50 Euros is sufficient. There is no need to prove the provision of capital. Even an in-kind establishment by providing services is possible.

By establishing a corporation, the business assets can be protected, for example, by keeping vehicles or tools in the personal ownership of the entrepreneur and having the purely operational business activities carried out by the company. .... read more

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Liability Capital Amount

Firmengruendung.de 0 3921
In the case of a Ltd, there is famously no restriction regarding the minimum amount of liability capital. Many entrepreneurs therefore approach formation with the mindset of "the less the better," which initially seems understandable. However, it's important not to forget that the company must not become over-indebted. A question that entrepreneurs will increasingly have to justify in the future is: "How was the company financed?" Example: Entrepreneur A establishes a LTD with 100 pounds. In the first three months, he incurs the following costs: trade register and notary fees of €200, postage costs of €50, phone €150, rent €1,500. This money had to come from somewhere! It certainly didn't come from the entrepreneur's deposit! Possible sources might include financing (e.g., from a loan) or revenue. The fact that Ltd corporate law does not specify how much money an entrepreneur needs for his new project does not mean that he doesn't need any money! Therefore, the following questions must be asked: 1) How much money is needed for the business setup? 2) Where does the money come from (initial capital, external financing, revenue)? 3) How much additional buffer is needed to prevent underfunding? Final note: If there are any uncertainties, it is strongly advised that entrepreneurs consult with an accountant who can assist with creating a forecast and later the opening balance sheet.
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Changes by Secretary or Director

Firmengruendung.de 0 5644

Among the most important changes, in addition to the transfer of shares, are the changes of secretary and director.  

It is particularly important to know that such changes must be reported to Companies House within 14 days after the change by the respective resolution!  

As part of our support services, we are naturally at your side for changes and ongoing management.

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