Anyone who trades in goods or services in Germany must register a trade. Exempt from this rule are the so-called freelancers, according to § 18 of the Value Added Tax Act. These are free from the obligation to register, because they are already listed as a practitioner of a liberal profession at the tax office. Freelancers are for example doctors, lawyers, engineers and many other activities. In case of doubt, the responsible tax officials assess individual cases on application. Moreover, a list of free professions can be obtained from the relevant Chamber of Industry and Commerce (IHK).
Registering a business: What documents are needed?
The trade is applied for at the trade office of the city. The application can be made in person as well as in writing or online. The identity card or a passport together with the registration certificate of the place of residence is to be presented. A third party can also register the business. All he needs is a power of attorney from the person to be registered and a photocopy of the ID card. If it is necessary to register the new company in the commercial register, the extract from the commercial register must also be presented at the time of registration, as well as a memorandum and articles of association certified by a notary public. In addition, there are a number of exceptions, such as the opening of a catering business or a handicraft business. Further documents must then be submitted, such as a certificate of good conduct from the police, a business license or a clearance certificate from the tax office. In case of doubt, the responsible IHK is the first point of contact for clarifying questions and uncertainties regarding the form of the trade.
At the trade office: Register a trade – for companies
Incidentally, in the case of a sole proprietorship, such as a sole trader, the owner of the business must be the applicant. In the case of partnerships, such as a civil law partnership (GbR) or a general partnership (OHG), the managing director must register the trade. However, the application can also be made by the managing partners. In the case of a corporation, such as a stock corporation (AG), the managing director authorized to represent the company must register the trade. In most cases, the Trade Licensing Office can be found in the city, municipality or district administrative authority. In some places the IHK is responsible for trade registrations. After successful registration of the trade, a trade license is issued. As a rule, between 15 and 50 euros must be paid for it.
What must be done after the successful registration?
Those who have to register their business will be confronted with a number of further procedures. In some cases, the authority to which the application has been submitted will pass on a notification to the trade association. In addition, a report can be made to the IHK, to the local court (commercial register) or to the State Statistical Office. In the event that one or more employees are to be employed, the Employment Agency issues a company number, which incidentally consists of eight digits. In addition, it is necessary to join the employers' liability insurance association. This is accident insurance for employees. They are thereby insured during work and on the way to or from the office to home.
The tax office must be informed?
Anyone who has to register a trade should be aware that the tax office will immediately receive information from the city about the registration. As a result, the various taxes must be paid to the state. Due among other things:
– The value added tax (VAT) is calculated on the turnover. – The income tax (ESt) is deducted from the income after the income tax return is filed. – The value added tax (VAT) collected.) must be paid against the issued VAT. Be charged and paid. – The trade tax (GewSt) is also levied by the state. However, partnerships as well as sole proprietors have a high tax allowance, which is currently 24.500 euros. – Corporate income tax (KSt) must be paid by corporations, cooperatives as well as associations and similar companies. This amounts to 15 percent of the taxable income.
If you are not familiar with the individual types of tax, you should consult a specialist such as a tax advisor. An overview of the types of taxes. Their exact meaning can be requested from the IHK.
What is a small business?
A small trader may be able to benefit from certain legal regulations that eliminate excessive bureaucracy. In addition can be saved thereby at the edge also still few. Small business includes companies that do not have an established business operation. At the time of establishment, the turnover must not exceed 17.Amount to 500 euros. In the following year it must not exceed 50.000 Euro. Those who wish to register such a trade or similar will be listed as entrepreneurs at the tax office. However, he is not a merchant.
The advantages of a small business at a glance:
– no obligation to prepare balance sheets for small businesses – advance sales tax payments within the fiscal year do not apply – no sales tax on invoices – input tax does not have to be deducted in the case of the revenue surplus account
Anyone who has to register a trade can obtain a lot of information in advance from the IHK. This is happy to help. Quickly continued. The trade office can usually be found within the competent administration. No one has to visit the trade office in person for this purpose. Because also a written request as well as the filling out of an on-line form are permissible means for the application. The business registration is not without consequences. In any case, the tax office will contact you with a new tax number. Henceforth, various taxes must be paid to the state. For newcomers it is recommended to go to a tax advisor.