Choice of legal form and its bureaucratic consequences (e.g. GbR vs. GmbH)

The choice of Legal form is one of the most important decisionswhen you set up a company in Germany. It not only influences liability, but also the bureaucratic effortwhich Costsand how you have to register with the tax office, commercial register, etc.

GbR - partnership under civil law

Advantages:

• Quick and easy to set up

• No minimum capital required

• Little bureaucracy

• No entry in the commercial register necessary

Disadvantages / bureaucratic consequences:

• Personal liability with the entire private assets

• No own company name in the legal sense (only first name + surname)

• Not suitable for complex or growing companies

• No separate legal personality (the shareholders act in their own name)

• No obligation for double-entry bookkeeping (but clean bookkeeping is still necessary)

As an employer:

• You need a Company numberto register employees

• Every shareholder must be registered with the tax office

• The GbR receives a joint tax number

• No VAT ID number mandatory, but possible

Brief comparison: GbR vs. GmbH