Firmengruendung.de / Friday, January 19, 2007 / Categories: Limited (UK) Liability Capital Amount As is well known, a Ltd does not have any restrictions regarding the minimum amount of liability capital. Many entrepreneurs therefore go into a startup with the mindset of "the less the better," which initially seems understandable. However, it must not be forgotten that the company must not become over-indebited. The question that entrepreneurs will increasingly have to justify is: "How was the company financed?" Example: Entrepreneur A starts 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 contribution! Possible sources could be financing (e.g., from a loan) or income. The fact that Ltd corporate law does not specify how much money the 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 (capital stock, external financing, revenue)? 3) How much additional safety cushion is needed to prevent underfunding? Final note: If there are uncertainties, it is strongly advised that entrepreneurs consult a tax advisor who can assist with the preparation of a budget and later the opening balance sheet. Previous Article Changes by Secretary or Director Next Article very satisfied Print 3921 Tags: LimitedStammkapital Ltd Related articles Basics of the LTD Structure Purpose of the LTD and Opening of Branches Status of Limited Companies in Germany Changes by Secretary or Director Forming as Group and Holding