A Funnel To Setting Up A GmbH In Germany
Setting up a company in Germany can come up with a lot of challenges. There are usually three types of corporations you can set up: GmbH—Gesellschaft mit beschränkter Haftung also known as “company with limited liability” AG—Aktiengesellschaft also known as “public limited company” UG—Unternehmergesellschaft haftungsbeschänkt also knownas a “mini-GmbH” Setting up a GmbH in Germany limits your liability. In case anything at all goes wrong, the responsibility lies in your company and not with you personally. When you own a GmbH or in other words a limited company, the liability rest with your corporation. Your private life does not get subjected to any liabilities of the company. It can be as big or as small as you like. You could be a massive conglomerate or a one-man show, without any support staff. There are some exceptions to this limiting in liability, mainly having to do with taxes and social security taxes. You may be liable for these despite everything. How Taxes Work With A GmbH Your VAT would stay the same irrespective of whether you’re a GmbH or sole proprietor. But that is the only similarity between the two. Taxes involved in a GmbH are much more complicated and have a lot of formalities. So you should hire a tax consultant for yourself as it is not easy to do GmbH taxes yourself. Finally, the tax rate for GmbH companies varies, but at the corporate level, there are two types of taxes, a GmbH must pay: Corporate Tax which takes around 15% The Trade tax which is also around 15% If there are shareholders involved there may be another tax you might have to pay, but that does not apply to every company.
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