Review your business idea


Prepare a business plan


Financing & public support


Business or liberal profession


Legal structure


Taxes & Accounting


Company insurance


Social insurance


Networks & contacts

Choice of legal structure

Which legal structure fits best your plans depends on a number of factors, all of which require thorough examination. For example, the legal structure you choose will affect your personal liability, the start-up costs, the taxes you pay and various other rights and obligations.

You want to start a business and need to decide which legal structure to adopt:

  • Which legal structure fits best your plans?
  • How does the choice of legal structure affect you and your business?
  • Type of your self-employed activity: Business or liberal profession?

Unincorporated firm (excerpt)

  • Sole proprietorship (1 person)
  • Civil-law partnership (GbR) for 2 or more people

Partners in unincorporated firms are fully liable with all the private and company assets.

Start-up expenses

Business people [Gewerbetreibende] register their business with the trade office for a fee of about EUR 50 per founder.

Business people [Gewerbetreibende] and members of the liberal professions [Freie Berufe] register their self-employed activity with the tax office and there is no fee. Are you not sure if your activity is a business or a liberal profession? Learn more on here.

In the case of civil-law partnerships (GbR), it is advisable to prepare a written partnership agreement.


Single-entry bookkeeping (i.e. preparing a net income statement) is sufficient up to annual revenues of EUR 600,000 and annual profits of EUR 60,000. However, if your business exceeds  either of these limits, the tax office will notify you that you must use double-entry bookkeeping (with annual balance sheet and income statement) and prepare a balance sheet. Single-entry bookkeeping is easier and less expensive, whereas double-entry incurs much higher running costs for tax consultation and accounting.

SchmuckbildLearn more about taxes and accounting on this website


Starting as a civil-law partnerships (GbR)? The Munich Chamber of Commerce and Industry provides information.

Good to know:
Even as a sole proprietor you can employ staff.

Company name

Liberal professions and small businesses that are not entered in the commercial register (“Handelsregister”) do not have a company and thus have no company name. You must include your full name and a complete, legally valid address on all business correspondence (such as letters, invoices, legal notice, etc). IT legislation also has to be complied with when communicating and trading online. However, you may also invent a name for your employment activities or classify them according to a particular activity or sector. Before you add any such additional names you should check that the name hasn’t already been registered as a company or trademark or is used by another company. It is important not to break any laws concerning trademarks, competition, or names. Businsses that are entered in the commercial register may use their full personal name as their corporate name, but do not have to.

SchmuckbildIHK Frankfurt “Company name law“, information in English


Have you decided on a legal structure and know whether to start as a business or a liberal profession? Learn how to register your self-employment with the Trade Office and Tax Office.

FAQ How do I register my business?

FAQ How do I register my liberal profession?

Please check, if you are obliged to register with other institutions and authorities such as the social insurance agencies, if you require any offical licenses or permits and which rules and regulations might be important when running your business.

New rules for civil-law partnerships (GbR) from January 2024

The new rules for civil-law partnerships (GbR) will come into effect on January 1, 2024. They will apply to new GbR partnerships that may be established as well as existing GbR partnerships.

The Act on the Modernisation of Partnership Law (MoPeG) introduces several changes. Two novelties are standing out:

  • the GbR is established as a civil-law partnership with legal capacity, it will be able to acquire rights and enter into liabilities itself
  • the GbR can be entered in a new company register, its corresponding legal form suffix will be “eGbR” or “registered partnership under civil law”.

The Chambers of Commerce and Industry (IHK) provide an overview as well as detailed information on the new rules.

The Chamber of Commerce and Industry for Munich and Upper Bavaria offers its (future) members free consultation. If you plan to have the GbR entered in the new register, please use the Chambers free service to have the GbR’s company name checked.

Incorporated firms (excerpt)

  • Limited liability company (GmbH) (1 or more persons)
  • Provisional company with limited liability (Unternehmergesellschaft UG haftungsbeschränkt) (1 or more persons)

At incorporated firms, liability is limited to the company assets. However, if due diligence requirements are violated, liability is no longer limited and and recourse can be made to the  manager’s private assets, too. One issue is frequently underestimated: Where bank loans are taken out, the need for collateral often leads to personal liability, for example if the partner gives  personal guarantees. This can also apply to rental contracts.

Start-up expenses

Compared to an unincorporated firm, the cost of setting up a limited liability company (GmbH/UG haftungsbeschränkt) is relatively high. The costs include notarial certification of the partnership agreement and entry in the commercial register, plus any fees paid to lawyers to draft the partnership agreement. A limited liability company also requires capital stock of at least EUR 25,000, of  which at least 50% (i.e. EUR 12,500) must be paid in when the entry is made in the commercial register.  Once this entry has been made, you are free to work with this capital.

SchmuckbildIHK Leitfaden: Wie lange dauert die GmbH-Gründung und welche ‎Kosten entstehen?‎

SchmuckbildIHK Leitfaden: UG-Gründung – welche Kosten kommen auf Sie zu? 

Company name

As a rule the company’s name needs to possess sufficient distinctive power. It may contain information about the enterprise’s commercial activity or branch, the name of one (or more) partner(s) or fantasy designations. You must add a suffix for the legal form showing the enterprise’s liability situation, for example “GmbH”. Your company’s name may not contain any additions obviously suited to deceiving. Make sure that an identical or very similar (confusable) corporate designation has not already been entered in the Register of Commerce in the same town or district.

We recommend you coordinate the planned company’s name with the the Chamber of Commerce and Industry for Munich and Upper Bavaria (IHK). You may use their free services

SchmuckbildIHK Frankfurt “Company name law“, information in English


In order to establish a GmbH or a UG haftungsbeschränkt in Germany, at least one shareholder (private individual or legal entity) is required. The involvement of a German notary is required for the incorporation.

The articles of association for both the GmbH and the UG haftungsbeschränkt company must be notarised. Registration with the German commercial register (Handelsregister) via a notary is mandatory.

In addition, legal persons governed by private law, registered commercial partnerships and trustees are subject to the transparency obligations pursuant to  the German Anti-Money Laundering Act (GwG). They are obliged to notify their beneficial owners to the registrar for entry in the transparency register.

For a standardized formation, model articles of association for set-ups by cash subscription with a maximum of three shareholders and one managing director are provided. These articles must still be notarized, but for a reduced fee. In addition, sample deeds are also provided by the chambers of commerce and industry (Industrie-und Handelskammer, IHK).

From August 2022 onward, online formation of a GmbH or UG (haftungsbeschränkt) by way of cash contribution will be possible – enabling a remote and faster incorporation procedure. The online notarization takes place in a video conference between the notary and the parties involved. The German Federal Chamber of Notaries provides a video communication system with a two-step identification procedure that requires an electronic proof of identity (eID).

Once registered in the commercial register, the GmbH or the  UG haftungsbeschränkt become a legal entity and the limited liability exists.

Before business operations are started, you need to register the company with the local trade office and tax office.

Please check, if you are obliged to register with other institutions and authorities such as the social insurance agencies, if you require any offical licenses or permits and which rules and regulations might be important when running your business.

SchmuckbildFind a notary in Munich

SchmuckbildFive-step formation process

SchmuckbildIHK-Leitfaden: Welche Schritte sind für die GmbH-Gründung ‎erforderlich?‎


IHK-Leitfaden: UG gründen: die 9 Schritte bis zur ‎Anmeldung


Double-entry bookkeeping (with an annual balance sheet and income statement) is always compulsory for incorporated firms, regardless of their revenue and profit levels. That means higher running costs such as for accounting and tax advice on top of higher start-up expenses.

Learn more about taxes and accounting


Freelancing in Munich: Freiberufler or Gewerbe?

The terms “Freiberufler“, “freelancer” and “self-employed” are often confused and used as synonyms.

Please note: Self-employed people in Germany are

  • either business people [Gewerbetreibende] with an activity that is classified as a trade or a business [Gewerbe]
  • or members of the liberal professions [Freiberufler] with an activity that is classified as a liberal profession [Freier Beruf]

Different rules apply to these two categories.

It is very important that you distinguish between these two types of new businesses and find out which one is right for you.  Read on here