This post is part of a series in which we are sharing our experience of founding a company in Germany. We hope that it will help others working their way through the foundation process. Read the first post in the series for more details.
Notary, banks and the commercial register
There are a few steps to the process of registering a company. LegalStrasse provides a rough guide with approximate durations for each step.
Founding a company in Germany requires at least one trip to the notary. Unless you’re using standard documents provided by the notary himself (Musterprotokoll), you’ll need to send the notary the foundation documents in advance. Also, don’t forget to bring a photo-ID.
The notary goes through the bizarre ritual of actually reading the documents out loud. It seems odd, but we actually caught a mistake in the document while doing this.
Once read, the documents need to be signed and you’re ready for a selfie. The notary then provides the documents you’ll need to open a bank account.
With the notarized documents, you can open an account at your preferred bank. It’s best to do some research in advance because the fee structure of banks offering accounts to businesses can vary quite a bit. This site has a nice overview of banks offering accounts to limited liability companies in German including what fees they charge. We opted to open accounts with an online bank for our holding companies, due to the simple online application process and the low fees. Note that very few online banks offer accounts to incorporated companies like the GmbH or UG, but some like Fidor and Penta do. We chose a full-service bank for our operating company in anticipation that we might need to speak to an advisor from the bank after launching our product.
It can take a few days for the bank to process the application and open the account at which point the shareholders can pay in their share equity. You’ll need a confirmation of the share equity payment to give to the notary. The bank will probably lock the account until you send them a confirmation that the company has been registered in the commercial register.
Commercial register, tax authorities, and the chamber of commerce
With confirmation that the share capital is in the bank, the notary will then proceed to register the company in the commercial register. He will also inform the tax authorities that the company exists and you’ll soon be asked to register the company with them (a good time to engage an accountant). The local chambers of commerce will learn of your registration and will consider you a member, early-stage companies are sometimes exempted from their fees.
How long did it take?
It takes a few weeks for the businesses to be registered. For the UG, the process took about a month, or more specifically 25 business days from the first appointment with the notary. Due to an administrative error by our notary’s staff, the operating GmbH took almost four months to appear in the commercial register.
Read the other posts in this series:
- Betting on the success of your business: why we decided to create a holding structure
- UG vs. GmbH: Selecting the business entity
- Choosing our advisors: do-it-yourself vs. finding someone qualified to help
- Planning for the best and the worst case: creating the foundation documents
- Making it official: notary, banks and the commercial register
- The cost of founding: a real-life example of founding a limited company in Germany
Disclaimer: We’re not lawyers or tax advisors, to stay on the safe side consult an expert before doing anything 😉