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Choice of the company form
For start-up founders and small ones Company the choice of form of company was limited so far. It usually remained at a high-risk GbR, the founding of a GmbH was simply too expensive. The recent ruling of the Federal Court of Justice on company law now helps less financially strong German companies to found a so-called Euro-GmbH.
The European Court of Justice had already ruled in its ruling on the 05.11.02 that entrepreneurs lawfully establishing a company within the EU in order to circumvent domestic (anti-corporate) corporate law are lawful.
The Federal Court of Justice has upheld this ruling at 13.03.2003 and thus recognizes the legality and legal capacity of companies based abroad.
The ruling of the Federal Court of Justice (BGH) now allows the limited liability companies founded in other European countries, the legal capacity in Germany. The BGH thus complied with the judgment of the European Court of Justice (ECJ). So far, Germany had against the
Blocked legal capacity
The legal capacity of companies from the EU countries in Germany. But this was contrary to the guaranteed European freedom of establishment and thus against EU law.
The European Court of Justice has thus issued a judgment which makes the formation of a company abroad more attractive. But who benefits, which disadvantages are to be taken into account and which tax specificities apply? For entrepreneurs, a company within a state of the European Union, this form of society must also be recognized in the other EU countries (so-called founding theory).
Is the establishment of a foreign company worthwhile?
Since there are significant differences in the minimum capital required in the individual Member States, especially when founding corporations, the establishment of a foreign company can be worthwhile. If you have to invest at least 25.000 EUR when establishing a German GmbH, it is only 7.500 EUR in France, 3.000 EUR in Spain and 2 Pound in the UK.
But this seemingly favorable foundation also has disadvantages from a competitive perspective. Customers and business partners are often suspicious when a Limited or Société anonyme appears on the letterhead. German: www.munichre.com / de / ir / corporate_go ..._ report.aspx It is better to place orders on German companies, which can be challenged on German ground if in doubt.
According to the 2 pound-limited-liability company, the tax office as a rule also expects a company that merely shields its shareholders and wants to protect profits by means of a skilful change of seat in front of the German state. Frequent and above all more intensive controls are therefore pre-programmed.
Before setting up a foreign company, it is important to seek a conversation with a tax or business consultant. Also important: despite being founded abroad, such corporations are often used in Germany for corporation tax.
The reason: According to § 1 Abs. 1 Corporation Tax Law, a foreign corporation is already subject to unlimited tax liability in Germany if it has its management in Germany.
Euro-GmbH for 279 Euro
With less risk: in particular entrepreneurs as well as small and medium enterprises profit from the new law. The founding act is no longer associated with bureaucratic and time-consuming hurdles thanks to the much simpler corporate law in England.
The start is faster, cheaper and safer. The biggest advantage is that personal liability is excluded with a Euro-GmbH. Up until now, young and smaller companies could hardly afford to raise 25.000 Euro equity for a German company. So it often remained with a GbR, combined with high risk. Because as owners of these companies you are liable with all their personal assets.
With the establishment of a limited company in England, they can now exclude this risk. Without large capitals. In fact, no more than 279, - Euro are necessary to make a Euro-GmbH from a German single company or GbR.
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