Starting a business in Germany - legal
Do you have an interesting business idea and you want to achieve great results? Do you have the opportunity to continue an already started business? Do you want to limit the risks of your business? Do you have the chance to start a business as part of a good team? Do you want to start from a small business?
You can establish your own company in many different ways.
- Founding a company
- Taking over an existent company
- Team founding
- Participation in existing companies
- Cooperation with other entrepreneurs
- Small foundations
Which one do you choose depends mainly on the three following factors:
- How much design-freedom do you want to have?
- How can we reduce the risks?
- Is there a good opportunity to buy or lease a company?
There are numerous questions that can come up in the contest of a business start-up, therefore is always recommendable to clarify all your queries in advance.
Only the most qualified and experienced entrepreneurs can act without the need of further consultations; if you do not have a lot of experience in this field, it is always recommendable to consult an expert before taking action.
The resulting legal questions can regard all different areas of laws. We are familiar with all kind of issues that could arise, we can help you finding practical solutions, and if necessary, we can help you achieving the perfect rounding for your individual purpose:
- Comprehensive legal advice and legal protection for entrepreneurs.
- Preparation and examination of contracts.
Starting a business: step by step into your professional indipendence
The following overview shows you the most important steps you should take to achieve great results with your company. Not all parts are always mandatory:
1. First of all, you should determine whether professional independence is the right path for you.
The establishment of a company should not be an emergency solution. Try to get a mental picture of the everyday life of a businessman: talk to already self-employed persons, read interviews or even biographies of entrepreneurs. Talk especially with your family: it must support your project. Determine which professional and business knowledge you have. Use the various “Founder Tests”, for instance, in the business start-up portal.
2. Work out your business idea.
Think about an idea of business that allows you to achieve your goals. Do you have the necessary skills to implement your idea? Identify who might be your future customers. Also, determine who are going to be your competitors. There is someone already offering your potential products? If yes, who? Above all, what differentiates your offer from the offer of your competitors? What could you do if you fail with your inspiring business idea? Consider the possibility to collaborate with a franchise-company that can lead you as a license entrepreneur. You could also take over an already existing company.
3. A consultation with an expert is always the best idea in order to compensate your weaknesses.
For more information, you can ask your local Municipal Business Development Department whether there is a start-up initiative in your municipality / region. Get in contact with other entrepreneurs. Attend entrepreneurial seminars at the Chamber of Industry and Commerce. Being assisted by a competent consultant (a professional or an expert that is part of the trade association) is always a good idea!
Please make sure to have clear in mind: Which issues do you need to clarify? Who could possibly help you? What should you consider when signing a consultancy contract? Find out more about the consultancy services of your Federal State.
4. Organize your business plan.
Make sure to organize your business plan yourself. This is the only way to gain knowledges and securities that will allow you to start your business successfully. Explain your business idea or your project. Please describe your professional and commercial qualifications. Present your product or service. Present your future customers and your competitors. Present your location. Explain your personnel planning if necessary. At what price do you want to sell your product or service? Which sales partners will you choose? What kind of communication and advertising measures do you want to take? What are your chances and your risks? What about your capital requirement? How can you cover this capital requirement?
5. Calculate your initial capital.
How much money do you need, to start your project? Please consider that (depending on the project) materials, office equipment, warehousing facilities, rental deposit, and renovations have to be financed. Keep in mind that you may have an initial phase of several months. What are the ongoing costs? Do not forget your monthly living costs. Please estimate realistically whether the income from your independent business will cover all operational and private costs ("profitability forecast").
6. Identify all eligible sources of financing.
How much money can you invest in your start-up project? Who could lend you money privately? Perhaps a shareholder could participate in your company? Find out about the credit conditions of banks and savings banks. In any case, consider the funding programs for entrepreneurs, which are made available by the Federal Government and the Federal States. It is very important to develop a financing plan. You can find all funding programs of the Federation, the “Länder” and the EU in the funding database (http://www.foerderdatenbank.de/).
7. Complete all necessary formalities.
For example, check with the Chamber of Industry and Commerce or the Chamber of Crafts (Industrie- und Handelskammer oder Handwerkskammer) which formalities/bureaucracy you have to deal with in order to start your company. You can also take advantage of the services offered by Municipal Business Development Department (Serviceangebote der kommunalen Wirtschaftsförderung oder Gründerinitiative) or founder initiative programs. Do not hesitate to ask whether you need special prerequisites, evidence, regulatory approvals or authorizations. Please check the official authorities guide (Behördenwegweiser).
8. Inquire about your tax obligations.
You will have some obligations with the taxation office. A tax consultant guaranties a constant support with all the taxation issues and obligations, the necessary accounting, and the annual financial statements.
9. Think about your personal and business protection.
For self-employed persons, there are different ways to protect themselves from a potential future unemployment, pension, illnesses and accidents. In any case, make sure to inform your health insurance company about your plans. Under certain circumstances, you can also decide to ask for an unemployment insurance (for self-employed) at the Employment Agency. For more information about your future retirement provisions, please contact the German Pension Insurance “Deutsche Rentenversicherung”, the Consumer Association “Verbraucherzentrale” of your Federal State and the “Stiftung Warentest” (Stiftung Warentest is a German consumer organization and foundation involved in investigating and comparing goods and services in an unbiased way; Source: Wikipedia). Make sure to think about the company's risk management. Take care of adequate and appropriate insurance for your company.
10. After the start, let yourself still be advised on your professional self-employment.
After the start of the business, new tasks and issues will come up. Continue to use appropriate information and advisory services. Avoid information deficits - you can quickly lead the company into a complete chaos. Taxation and legal advice should be as comprehensive as possible. Please do not hesitate to contact us for further information.
We also offer the following legal services in connection with a business start-up:
- Advice on establishing a business
- Legal for of the firm, liability and insurance
- Legal bases of marketing (naming, research, internet, competition law, etc.)
- Promoting business start-ups
- Supporting your business start-ups.