Laws and contracts

Entrepreneurs conclude numerous contracts on the path to starting a business. For example, the partners in a GbR can define their rights and obligations in a partnership agreement. However, Articles of Association are obligatory when setting up a limited liability company (GmbH/UG).  Contracts also define the relationship between you and your customers, employees, suppliers, property lessors, and other business partners.

General Standard Terms and Conditions (GTC), called [Allgemeine Geschäftsbedingungen | AGB], are pre-formulated contract conditions that you specify to your contract partners. They contain important provisions that would otherwise have to be individually adapted for every contract. The aim is often to reduce liability and risks as far as possible. The admissibility of individual provisions in the GTC depends on the industry and the contracting partners, for example. Some industry associations and publishing houses provide sample GTCs. Lawyers specializing in contract law create individual GTC. GTC are only effective if they are included in the respective contract and for this there are various rules for end consumers, corporate clients or for online trade.

Your customers have rights in the case of faulty or unsatisfactory products and services. They are based on the warranty you are legally obliged to provide as well as voluntary guarantees and product liability, the legal liability of the manufacturer, importer, and, if applicable, seller/supplier. Make sure you have a good overview of basic contract and liability law so that your business can develop as planned and liability risks are avoided.

Internet legislation is a broad topic which website and internet shop owners must address. It includes areas such as:

• Legally compliant websites and website information
• Online trade and e-commerce: ranging from GTC,
• product liability through to disclaimers
• Marketing and advertising on the internet

Find out which regulations and information obligations must be followed on the internet, which pitfalls can be avoided and who is liable for them.

The EU General Data Protection Regulation (GDPR), in German “EU Datenschutz-Grundverordnung | DSGVO” specifies clear rules for the processing of personal data within the European Union. Everyone dealing with customers and employers must be aware of and implement these rules. Expensive warnings and fines can be avoided by doing so.

This also applies to entrepreneurs who, for example, only run their own website.

Prerequisite is that they do not infringe on any existing trademark rights and brand names. An internet domain name or your company name can be protected by use in a business context – limited to your company’s geographical area of activity. The local Chamber of Commerce and Industry (IHK), the Patent Center Bavaria and the German Patent and Trade Mark Office offer information and free initial consulting. For further services you can turn to a lawyer specialized in matters for patents, designs, and trademarks.

Regardless of legal structure, entrepreneurs can employ staff. You need to consider various factors, from the nature of the employment contract and registration obligations to social security contributions. It is also important to note differences to service contracts for freelance workers (“freie Mitarbeiter”) and the hiring of temporary staff (“Leih- oder Zeitarbeitern”). Issues such as working hours, holidays and sick leave, parental leave, references and employment termination also play a role later on.

From the perspective of social security, it is often difficult to distinguish between genuine self-employment and activities that constitute regular employment. What is known as “false” self-employment may exist if someone claims to be self-employed, although the work they do and their relationship to the customer points to dependent employment. “False” self-employment can lead to unpleasant legal and tax consequences.