[ESTABLISHING A BUSINESS ENTITY IN GERMANY]
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showing the existence of the foreign company and the power of representation of the managing director(s) and the management board as well as from memorandum and articles of association. All documents should be in German certified translation and the notary’s certificate must be authenticated. Trade Office Registration The autonomous branch office must be registered with the trade office before • business operations are started. A business license or permit is generally not necessary for registering the business. Only for some business sectors, a permit or authorization may be required. Trade office registration must be submitted on commencement of business at the latest. (ii) Dependent Branch Office A dependent branch office ( unselbständige Zweigniederlassung ) is a subordinate department of the head office company and does not have any autonomy from it. It focuses on maintaining contacts and initiating business in Germany. The dependent branch office is not able to independently participate in the general business transactions of the head office. It performs support and implementation-related tasks without having any individual business discretion and is entirely dependent on the head office. An individual company name cannot be used. As a dependent branch office displays no autonomy vis-à-vis the head office of the company, it is not entered in the commercial register. The only formal requirement for a dependent branch office is registration with the local trade office, for which certain documentation on the foreign company is also necessary.
II. Business Registration 1. Entry in the Commercial Register In the establishment phase of a company - and prior to assumption of commercial activities - a company only has to be registered with the public commercial register (Handelsregister) and the local trade office (Gewerbe- /Ordnungsamt). The registration creates transparency and also offers companies the highest level of security in their day-to-day business activities. 2. Companies Required to Register Companies required to register are those which carry out a commercial business operation. This is determined by criteria such as the use of commercial accounting, annual turnover, capital resources and total number of employees. As a rule, all status relevant actions of companies are subject to registration. Small businesses, civil law partnerships (GbRs), freelancers and dependent branch offices do not have to be registered in the commercial register. 3. Registration Procedure The application for registration in the commercial register is electronically filed in publicly certified form by a notary to the responsible commercial register. As a rule, with types of company in which the entry in the commercial register is part of the act of establishment, the possible limitation of liability of the partner(s) is only effective subsequent to the time of the entry in the commercial register. If business is carried out prior to this point in time, partners can be liable for any losses of the company with their private assets (especially the case with corporations).
ILN Corporate Group – Establishing a Business Entity Series
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