As Deutsche Welle notes, the founder of the company in this case is the sole owner. He can hire employees and is liable for obligations with all his assets. There are no minimum requirements for starting capital to open such a company, and everything is simple in terms of bureaucracy.
Trade license
To begin, you need to open a business account (Geschäftskonto) at a bank. It will later be needed by the trade office and tax office, as well as to issue invoices to clients. Some banks provide this service for free, while others charge 70 to 100 euros per year for account maintenance.
After that, you should contact the trade office (Gewerbeamt) and obtain a trade license (Gewerbeschein). In many German cities, this can be done online. You need to fill out a special form, indicating the legal form of the business, your personal data, the nature of the business activity, and bank details.
Issuing the certificate costs between 15 and 60 euros in different regions of Germany. It must be obtained within two weeks of starting work. In some cities, such as Berlin, this can be done online.
Depending on the field of activity, an additional permit may be required. For example, if a hairdresser plans to open their own salon, they must have a master's qualification or hire an employee with such qualification. The same applies to carpenters, roofers, painters, locksmiths, bakers, and other representatives of craft professions. A craft business requires registration in the craft register (Handwerksrolle).
A mandatory permit is required for taxi companies, gambling halls, pharmacies, driving schools, freight transport companies, or travel agencies. Information about additional licenses is provided by the public order office (Ordnungsamt), the Chamber of Commerce and Industry (IHK), or the Chamber of Crafts (HWK) at your place of residence.
Registration with the tax office
An exception is made for representatives of liberal professions (Freiberufler): journalists, artists, alternative medicine practitioners, farmers, foresters. In their case, obtaining a trade license is not required. It is enough to send a letter in free form to the tax office with a brief description of your business intentions and a request for a tax number.
After that, the tax office will ask you to fill out a tax registration form. This can be done online after registering in the Elster system. The procedure is free. It is recommended to complete it within four weeks of starting your business activity.
Other sole proprietors fill out the tax form after registering with the trade office. You will need to indicate the amount of income you expect in the next two years. This will help the office calculate the amount of income tax and corporate tax.
If an entrepreneur establishes a company with employees, they must also contact the Federal Employment Agency (Bundesagentur für Arbeit) to register and obtain a company identification number (Betriebsnummer). This number is required for social security and insurance contributions.
Registration in the Commercial Code
Anyone who intends to engage in the purchase and sale of goods, processing and manufacturing of products for others, insurance for compensation, banking operations, transportation of passengers and goods, or other similar types of commercial activities must register in the German Commercial Register (Handelsgesetzbuch) as a merchant. In this case, the company name does not have to consist of the owner's first and last name; it can be arbitrary.
A sole proprietor registered as a merchant is obliged to keep accounts, provide information in the form of a balance sheet, and conduct inventory. Registration costs between 15 and 200 euros.