Which legal form is best suited for my start-up?
December 5, 2023 | 40,00 EUR | answered by Martina Köhler
Dear tax consultant,
My name is Dennis Heuser and I am about to start my own business. I have already developed a business concept and am ready to take the step towards self-employment. However, I am now faced with the important question of which legal form is best suited for my start-up.
Currently, I am operating as a sole proprietor, as this seemed to be the easiest option to start with. However, I am concerned that this legal form may not be the best choice for my future company. I have heard about different legal forms such as GmbH, UG, or OHG, but I am unsure which one is most suitable for my business concept.
My main concern is to minimize liability risks and to be optimally positioned in terms of taxation. I also want to ensure that my legal form is flexible enough to successfully expand my business in the future. Therefore, I urgently need professional advice to understand the advantages and disadvantages of the different legal forms and make the best decision for my start-up.
Can you help me and provide recommendations on which legal form is best suited for my company? I look forward to your support and thank you in advance for your time and expertise.
Best regards,
Dennis Heuser
Dear Mr. Heuser,
Thank you for your inquiry and your interest in my consultation for your business start-up. I am pleased to hear that you have already developed a business concept and are ready to take the step towards self-employment. The choice of the suitable legal form for your company is indeed an important decision that you should carefully weigh.
As a sole proprietor, you are the sole owner of your business and therefore also bear the full liability for all business obligations. This means that your personal assets are at risk in the event of the company's insolvency. To minimize liability risks, it may therefore be wise to consider a different legal form.
A GmbH (limited liability company) or a UG (entrepreneurial company) offer the advantage of limited liability, where your personal assets are generally protected. However, these legal forms are associated with certain legal requirements, such as a minimum capital for the GmbH or a requirement to form a reserve for the UG. In addition, the start-up costs and ongoing administrative expenses may be higher than for a sole proprietorship.
On the other hand, an OHG (general partnership) is a partnership where all partners are jointly and severally liable for the obligations. However, this could be more flexible if you wish to work with partners and jointly establish a company.
In order to determine the appropriate legal form for your company, it is important to consider your individual goals, needs, and future visions. A detailed consultation with a tax advisor or lawyer is therefore highly recommended to discuss the advantages and disadvantages of the various legal forms in detail and make an informed decision.
I am available for a personal consultation to answer your questions and find the optimal legal form for your business start-up. Please do not hesitate to contact me to schedule an appointment for an online consultation.
Thank you for your trust, and I look forward to supporting you in your endeavor.
Sincerely,
Martina Köhler
Tax advisor
