Hi everyone!

I want to start a new business - offering consulting and advisory services, and I'm struggling between opening a Ltd in UK or waiting until November for the mini Gmbh.

I'm also not clear what are pros and cons between these types of business.

I know that I can do provide such services as freelancers, but I do not want to be responsible with family assets - never know what will gonna happen.

I appreciate if someone can shed some light on the mini Gmbh in comparison with the Gmbh and what would be better, a Ltd or mini Gmbh.

I assume a turnover of 15-20k a month.

thanks in advance
Adis

Hi Adis,

because of the success of the UK Limited the Germans wanted to establish a kind of GmbH which is able to compete with the UK Ltd.

I repeat the main difference... for the Ltd. you do not need 25.000,-€ to start up as for the GmbH. The mini GmbH is also possible without having 25.000,-€ but at the end of the year you have to give a part of your profit untill the 25.000,-€ are reached.

So it is not a real big advantage. From the tax point of view there is no difference between the Ltd., the GmbH and the mini GmbH, you always need a very good tax consultant!

The costs for the Notary are less for the Ltd. than for the GmbH.

People say that the Limited has a bad image in Germany. I doubt that or at least, I do not think that the image of a GmbH is better.

In your individual case you should think twice before you start one of the possibilities, because there are a lot of costs which you could save if you use the trust7 Umbrella Service for freelancers. The umbrella company makes the contracts with your client and pays you the complete money which is paid by your clients, minus a small amount for the service.

So your liability is limited, but you do not have to struggle through the bureaucratic jungle in Germany and you can concentrate on your job!

Goood luck
Detlef

Hi Detlef,

could you please provide more information about the T7 umbrella services which you refer to?

I am planning changes from FTE to freelancer so that kind of information is valuable for me. I have NE-EG (Daueraufenthalt-EG)

Thanks,
Pwehrli

Hi Detlef,

About your message of small Fee for the service you provide, it would be beneficial to all members specially the silent ones, what amout would this result in. Like a percentage of billing or fixed amount ?

This is just a suggestion.

Regards
Savio

Hi pwehrli, savion, all interested members!

I offer everybody to contact me personally for an individual offer of our services.

Additionally I want to give you some more details:

Our umbrella company can employ people who do not have the right visa for freelancing and give them the chance to work on their own projects similar to a freelancer, but in the name of our company.

Freelancers can make a contract with the umbrella service company and we will take care of getting the money from the clients, deal with new clients before the active project will finnish.

Because our umbrella company is a registered Limited, the liability against the clients is also limited.

I myself can communicate with any possible client, in German, and as soon as there are more of you involved, everybody can pass projects which are not interesting for himself to one of the others. Of course for a small commission.

We can get advices from lawyers and tax advisers which are valuable for everybody and help to save taxes in a legal way.

We provide an office and secretary service.

The fees will be depending on the individual case and they will be between 3 and 9 percent of the turnover.

These are only a few points, but I hope this helps to understand the concept.

I wish all of you a great weekend!
Detlef

It is really remarkable how the competition of EU company’s has stirred the German Legislative into action. The reform now passed by the German Parliament on 26 th June 2008 has brought along a simplified formation process with standardised documents. The formation of a one person GmbH (Einmann-GmbH) is also made easier by abandoning the requirement under the GmbHG for the sole shareholder of a one person GmbH to provide security for any amount of the registered capital not paid up.

It was first suggested to lower the statutory capital to 10.000,00 €. Instead of embarking on such a a reduction, the regular GmbH with a share capital of 25.000, 00 € stays put. As an economic means to establish a GmbH, there will be the “Unternehmergesellschaft” (UG), now commonly referred to as "Mini GmbH". It can be incorporated with a share capital as low as 1 €. One quarter of the company’s annual profit will have to be contributed to its capital reserves until the minimum share capital of a regular GmbH, i.e the 25.000,00 € target, is met.

In my opinion the GmbH or - as a starter the UG- is preferable to a UK Ltd. It can be easily formed and your are under German jurisdiction regarding company law without having to meet the requirements under the UK Companies Act 2006.

rechtsanwalt_jain@yahoo.de

Dear Vakalat,

thnaks for the detailed information about the so called 'mini GmbH'!

Regarding the comparison of a UK Limited against the GmbH I have a different opinion.

I can register a UK Limited within 2 or 3 hours and the limited liability comes nto effect immediately. With a GmbH it will come into effect after the registration at the Companies House (Handelsregister).

The rights and duties of a GmbH and a selfdependent branch of a UK Limited in Germany are equal and the formation can not be easier than for a Ltd.! As I wrote before, I can found one online in 2 - 3 hours.

The requirements for a Ltd. in UK are also very 'limited' ;- as long as the Ltd. does not act in Uk it is 'Dormant' and this is very easy to handle.

Have a great weekend, all of you!
Detlef :-)