Registration and entry in the commercial register
Information in brief (see below for more detail):
You may register your business in person or in writing at your local Consumer Protection Office (formerly the Economic and Regulatory Agency). Foreigners must observe some special stipulations when registering their business. All business people are merchants and may be incorporated in the commercial register. If your business is a concern established on a commercial basis, you must be incorporated in the commercial register. You will find information regarding the features which define trading. The commercial register is a public directory which creates legal security. In order to be entered in the commercial register your registration must be signed by a lawyer. The cost of entry for a one-man business or partnership is currently at least –250.00€ The cost of entering a limited company (GmbH) is assessed according to the value of the business. Unlike 'small businesses', merchants have special rights and obligations (as a consequence of the features of being a merchant). All commercial companies operating in Germany are subject to business tax. You will find the answers to common questions about business tax, and in particular how it is calculated, in our "Business Tax" leaflet.
How to register your business
Under § 14 of the German Industrial Code (GewO), the relevant authority must be notified when an independent business begins to operate. In Hamburg, this can be done at the relevant district office (Consumer Protect Agency), the Hamburg Chamber of Commerce or via the Point of Single Contact.
The fee for issuing a business registration is currently –20.00€ There are also additional fees for licences, which in some cases may be significantly higher.
When you come to register your business, please bring with you:
- Your valid identity card, or
- Your passport and your certificate of personal registration.
You may also ask someone else to register your business on your behalf. The person you task with registering your business needs a letter of authorisation and a photocopy of your proof of personal identity.
If you are notifying the start-up of a business entered in the commercial register, please bring the relevant extract from the commercial register with you, along with the articles of association certified by a lawyer. If the company is still being formed, the certified articles of association are sufficient.
Tips when registering a business:
- If a one-man business which is not incorporated in the commercial register is being registered, the certificate of business registration is issued in the name of the owner.
- If you are forming a partnership under the German Civil Code (Gesellschaft bürgerlichen Rechts, GbR), please note that each partner generally requires a certificate of business registration in his own name.
- If you want a business to be entered in the commercial register, for example registered merchant (eingetragener Kaufmann, e.K.), general partnership (Offene Handelsgesellschaft, OHG), partnership limited by shares (Kommanditgesellschaft, KG), Limited Liability Company (Gesellschaft mit beschränkter Haftung, GmbH), the company name registered in the commercial register is indicated on the business registration.
- When forming an incorporated partnership, a general partnership (OHG) or a partnership limited by shares (KG) for example, it is compulsory to notify every managing partner; in the case of a limited company (GmbH), it is the company, operating through the managing director, which must be notified.
Note: simply registering a business does not allow commercial activity to begin where a special permit (e.g. catering licence) or incorporation in the register of craftsmen is required.
Tip: Clarify any compulsory licences with the Chamber of Commerce in advance!
When you have registered your business, the Consumer Protection Office will advise the relevant tax office, the professional association and, depending on industry classification, the Chamber of Commerce or the Chamber of Crafts.
- For citizens of member states of the European Union, registering a business, provided it is not a handicraft business, should present no problems. You simply need to produce a EU residence permit to which you are legally entitled. As a rule, this EU residence permit is issued by the competent aliens' department of the Consumer Protection Office on presentation of various pieces of evidence. Initially, the permit is issued for a limited period and then extended until the conditions for a permanent residence permit are achieved. The period of validity is at the discretion of the authority. The residence permit is usually issued for one year and extended for two years at a time. It may subsequently be extended indefinitely.
- Special rules apply for citizens of countries with which the Federal Republic of Germany has special agreements (e.g. USA, Canada, Switzerland).
- All other foreigners, provided they are still in their home country, must apply to their respective German embassy for an unrestricted residence permit, i.e. one which entitles them to run a business. Foreigners already resident in Germany must apply to the aliens' registration office for the condition in their visa to be amended, i.e. for the restricting note in their residence permit to be deleted.
Tip: You should discuss any legal questions relating to foreigners with the aliens' registration office prior to registering your business.
What is the commercial register used for?
The commercial register is a public index. It is managed by the county court of Hamburg. The role of the register is to create legal security (e.g. when signing contracts). As such, it includes information about companies' actual and legal circumstances for anyone who is interested (e.g. precise company name, company's head office, the relationships between owners, any limits to liability and who is authorised to represent the company). Balance sheets and lists of shareholders may also be viewed at the county court. All new entries and amendments (e.g. change of managing director, power of attorney and de-registrations) are published in the Federal Gazette, the Official Gazette and the local newspaper (currently Hamburger Abendblatt, Die Welt).
Who may/must be incorporated in the commercial register?
Generally speaking, all business people are merchants, and must therefore be entered in the commercial register, unless business operations are not of such a nature and scale as to require a commercially organised business establishment. Put another way: if your business operations are of such a nature and scale as to require a commercially organised business establishment (i.e. requirement for accounting, corporate management, commercial system of representation and responsibility), you are a merchant, and entry in the commercial register is compulsory. If your business operations are not of such a nature and scale as to require a commercially organised business establishment (so-called small businesses), you do not have to, but are entitled to, be entered in the commercial register. If you decide to avail yourself of this entitlement and be entered in the commercial register, you will be entered as a registered merchant.
The provisions of the German Commercial Code (HGB) apply to all merchant - including those who have become a merchant only because they are entered in the commercial register. If your business operations are not of such a nature and scale as to require a commercially organised business establishment, and you are not entered voluntarily in the commercial register, only the German Civil Code (BGB) applies to you; if there is a dispute as to whether you are a merchant, you must demonstrate as necessary that your company is not established on a commercial basis.
What are the consequences of being defined as a merchant?
A merchant, unlike so-called small businesses, has the rights and obligations below:
- You may grant power of attorney, i.e. give employees wide-ranging business management and representational authorisations. Because of its particular significance, any power of attorney you grant will be entered into the commercial register.
- You may freely agree a court of jurisdiction and sign special agreements without legal intervention.
- You may verbally provide guarantees, commitment to pay debts or acknowledge a debt.
- You must observe the accounting and balance sheet stipulations relating to commercial law.
What do you need to be aware of when being entered in the commercial register?
You should first consult a notary. He will help you to formulate your application for entry, certify the application and submit it to the commercial register department of the applicable county court. On request, the Hamburg Chamber of Notaries will give you the name of a lawyer in your vicinity.
The Chamber of Commerce supports the county court in managing the commercial register. The county court requests an expert opinion from the Chamber of Commerce when a company applies to be entered in the commercial register or requests an amendment.
Tip: to avoid subsequent objections and costly changes, as well as accelerate entry, you should agree the proposed company with the Chamber of Commerce in advance (Legal Affairs & Fair Play division)!
What costs will I incur by becoming entered in the commercial register?
The costs of entry are scaled according to effort required. For a one-man business, you should currently expect to pay at least –250.00 (legal and court costs combined). Estimated costs for incorporation of a limited company (GmbH) with equity of –25,000.00 vary, for example, from around – 500.00 - 700.00 plus the cost of any lawyers or tax advisers.
Entry in the commercial register does not replace the certificate of business registration.
You must apply for a trade certificate for each commercial activity, even if you are already entered in the commercial register.
In the case of general partnerships (OHG) and partnerships limited by shares (KG), each partner must request a certificate of business registration; for limited liability (GmbH) companies, the managing director must register the business.
|District Court Hamburg|
Tel. +49(0)40 42 843 3440 or 4313
Fax.: +49(0)40 42 843 4718 or 4719
Hamburgische Notarkammer/Hamburg Chamber of Notaries
|Hanseatische Rechtsanwaltskammer/Hanseatic Chamber of Lawyers|
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