Standard vs. Individual Founding
What is the difference between a standard and an individual formation?
The requirements for an individual formation are the same as for the standard formation but with some major differences. Your company will have:
- more than one director,
- more than three shareholders,
- initial capital of more than € 300 (when it comes to a UG) or 25 k€ (when it comes to a GmbH), and / or
- articles of association differing from what the law provides.
Why does having a different setup than above disqualify my setup to be "standard".
The lawmaker wanted to develop a competitive legal structure to the UK Limited and also provide startups with an affordable setup to start their business and look for an investor. For this reason parliament reduced the legal costs as shown for the standard formation in order to enhance low budget corporate start-ups.
For which form does the standard approach apply?
This privilege is applicable for the UG as well as the GmbH.
What is the disadvantage of opening a "standard" company?
The law sees no "disadvantages". The greatest hindrance will be that the contents of your articles of association are defined by the law and you can't change them.
What do you mean the articles of association "not eligible for changing". This sounds illegal because aren't we living in a free economy?
Yes and no. Yes, we live in a free economy where you can shape your affairs inside the law. No, the articles of association may not be changed – inside the standard opening. The reduced fees come with the price of a strict setup.
Right now, I can only afford the standard setup. When can I change the setup?
You can always change the setup! There is no time limitation for how long you must have maintained specific participation. When you want to change shareholders, directors and/or more, then you best connect with your notary and get the details changed.