Do I have to register my company

Register your company: Here's how!

When do I have to register a company?

According to Section 14 of the Trade Regulations, a trade must always be registered when a commercial activity begins, i.e. the following points are met:

  • The activity is carried out independently,
  • is designed to last and
  • there is an intention to make a profit.

This is to be distinguished from liberal professions for which no business has to be registered.

1. Register company: according to legal form & branch

When founding a company and at the beginning of self-employment, you have to stop by some offices, authorities and institutions: the trade office, tax office, IHK, commercial register or professional association are among the most important places to contact when registering a company. If, however, there are employees in your company, the Federal Employment Agency is also on the routing slip for dealing with authorities when registering for the company. For freelancers, however, the first point of contact is not the trade office, but the tax office.

Depending on whether you want to register a secondary trade or a main trade, there may also be different registration steps.

Where founders ultimately have to register their company depends on the nature of their activity and the legal form chosen. In the following video you will find a compact overview of the most important administrative procedures.

Special features depending on the industry

We have prepared a guide for setting up a business in certain industries, in which we also go into more detail on the individual formalities and registrations. This includes the special founding steps for the following business ideas, among others:

  • Bakery, boutique, café, hairdressing salon, hotel, nail salon

Download the checklist now

Special industry tips for opening a shop, opening a restaurant or starting an online shop can be found in separate guides.

What does it cost to register a company?

What it ultimately costs to register a company with the authorities depends entirely on the legal form and your industry. Basically, however, it can be said that a business registration costs between 20 and 50 euros, an entry in the commercial register, excluding notary fees, is 180 euros and up. In addition, there are registrations at the IHK / HWK or the employers' liability insurance association, for which there are no registration fees but regular fees.

2. Register a company as a freelancer

As a freelancer, you don't do the classic registration of a trade with the trade office, but contact the tax office directly.

Freelancers do not need a trade license because they are not involved in any commercial activity.

3. Register small business or GbR

If you are setting up a sole proprietorship or a GbR, you have to go as follows when registering your company. These points mainly concern those who register a small business.

  • Register your business with the trade office. In case of doubt, this can also be done with a power of attorney if you cannot make it to the registration. In any case, you should register in good time in order to avoid any fines. To register, you need documents such as your identity card. Founders from other EU countries or third countries also need a residence permit.
  • As a rule, the tax office will automatically send you documents after you have registered as a business (questionnaire on tax registration). You can use this to apply for your tax number, for example.
  • If you have employees, you must apply for a company number after registering your business activity at the employment office.
  • As soon as you have registered a trade, you need to be a member of the Chamber of Commerce and Industry (IHK) responsible for you.
  • After registering the trade, you must also register with the employers' liability insurance association. This acts as a statutory accident insurance company.
  • Employees must be reported to the respective health insurance company.

At a glance, we have summarized the relevant authorities and offices, especially for small businesses and start-ups as part-time businesses.

Warning: small businesses vs. small business owners

Two terms, different meanings: small business owners and small businesses are not the same thing, but they are often confused. Small businesses are all founders whose turnover and profit do not exceed a certain amount and who are not entered in the commercial register, e.g. sole proprietorships or GbRs.

Small business owners are, however, entrepreneurs who make use of the small business regulation, i.e. do not show sales tax. Small businesses can certainly be entered in the commercial register and, for example, operate with a UG.

4. Register OHG and corporations

If you do not want to register a small business, but want to start as a merchant, general partnership or with a corporation, you have to take additional steps when registering:

  • Register your business with the trade office. For this you need an extract from the commercial register. If you want to register a business requiring surveillance, a valid certificate of good conduct is also required.
  • As a rule, the tax office will automatically send you documents after you have registered as a business.
  • If you have employees, you must request a company number from the employment office.
  • In this case, an entry in the commercial register is an additional obligation when registering a business. To do this, you need an appointment with a notary to certify the statutes. The notary then initiates the entry in the commercial register as soon as confirmation is available that the start-up capital has been paid into the business account (GmbH & UG). In case of doubt, the notary appointment can also be handled with a power of attorney if, for example, you are part of a team and not everyone can be present.
  • You must register a cooperative in the cooperative register. Furthermore, membership in a cooperative auditing association is required by law for a cooperative.
  • When registering a trade, membership in the Chamber of Commerce and Industry (IHK) responsible for you is mandatory.
  • You must also register the company with the employers' liability insurance association.
  • Employees must be reported to the respective health insurance company.

The process of founding a corporation also includes opening a business account. Here's what to look out for.

Compare business accounts now

5. Register a company as a craftsman

If you are starting up as a craftsman, numerous steps are identical to registering for a small business. An important difference is the contact to the Chamber of Crafts (HWK) instead of the IHK when you register your company. Many craftsmen are self-employed as merchants.

  • Register your business with the trade office.
  • As a rule, the tax office will automatically send you the questionnaire for tax registration after you have registered a business. You will then receive your tax number.
  • If you have employees, you must order a company number from the employment office after registering the business.
  • Compulsory membership in a Chamber of Crafts applies to craft businesses.
  • If you have founded a corporation (GmbH, UG) or an OHG or are active as a businessman, registration in the commercial register and thus a notary appointment is required when registering a trade.
  • Craftsmen also have to register with the employers' liability insurance association.
  • Employees must be reported to the respective health insurance company.

Must be a master craftsman or not?

Before founders register their craft as a trade, they should check whether the desired activity is a master craft or not. Additional permits may apply to the master craftsman's certificate, which must be presented when registering a business.

In particular, you should hand over tax issues and possibly also the bookkeeping to an experienced tax advisor so that you can concentrate on building your company. We would be happy to help you find a suitable tax advisor.

Find the right tax advisor now

6. Registration for health insurance & pension

As a founder, you are also obliged in Germany to provide for yourself and your employees to a certain extent. Therefore, contact with the following authorities is sometimes also mandatory:

Health insurance

First of all, you as the founder are obliged to take out health insurance, regardless of whether you are a freelancer or a trader. Basically, you have the choice between private and statutory health insurance.

However, if you were previously privately insured as an employee, it is not possible to return to statutory health insurance without further ado. Your salary would then have to be below the compulsory insurance limit in the last few months during the employment relationship (before the start-up). If you were previously privately insured and are over 55 years old, you cannot switch to statutory health insurance - this also applies to self-employment.

If you employ employees, you also pay their health and social insurance contributions on a pro rata basis.

Artists' social fund

Artists and publicists are compulsorily insured through the artists' social insurance fund, which also pays a proportion of the contributions to the statutory pension insurance.

Voluntary and compulsory pension insurance

Many founders are under the mistaken belief that they are exempt from compulsory pension insurance. In fact, certain professional groups are still compulsorily insured. These include:

  • Educators, child minders, midwives and obstetricians
  • Artists, musicians and publicists
  • Craftsmen and home traders

For a complete list, explanations of the exceptions and other important information, see our article on private and statutory pension schemes for founders. You can have the pension insurance check whether you are required to have insurance in your individual case.

If you do not have compulsory insurance, you have the option of voluntary pension insurance. In this way, you can enjoy the advantages that pension insurance offers - including, for example, the disability pension and the relatively stable return. The previously acquired entitlements are retained in this way. You can also use the tax-subsidized Rürup pension.

In particular, you should hand over tax issues and possibly also the bookkeeping to an experienced tax advisor so that you can concentrate on building your company. We would be happy to help you find a suitable tax advisor.

Find the right tax advisor now

7. Guide to authorities from A to Z.

Becoming self-employed and dealing with authorities - two things that belong together. Depending on the industry and legal form, there are also various administrative procedures. Our official guide helps you with this in a compact and clear manner.

The district court makes entries in the commercial register. These are mandatory if you want to register your company as a merchant, as a corporation or as an OHG, for example.

Whether a sole proprietorship has to be entered in the commercial register depends on the following factors:

  • Annual turnover - depending on the industry
  • Amount of capital employed
  • Type and number of business transactions
  • Obtaining and granting credit
  • Size and condition of the business premises
  • Type of bookkeeping
  • number of employees

Trading companies are also considered to be merchants. Trading companies are partnerships (OHG, KG, EWIV) and corporations (AG, limited partnership on shares, GmbH).

Small businesses and commercial companies under civil law (GbR) are not required to be entered in the commercial register.

If you would like to employ people in your company, you will need a company number. This is issued by the Federal Employment Agency. You then use the company number to register your employees with social and health insurance. Make sure you apply for your company number in good time: the approval of the application usually only takes a few days; however, it must be done before you hire your first employee.

The building authority - in some cases also the building supervisory authority - is responsible, among other things, for designating building areas and defining commercial and industrial areas and other areas. This is relevant if you want to use operating rooms that were previously used for a different purpose: this change of use must be approved by the building authority. Any alterations that may become necessary or the use of additional adjacent areas must also be approved by the building authority.

Most start-ups have to register with the employers' liability insurance association immediately after setting up a company, if this has not already been done by the trade office. The employers' liability insurance association is responsible for the accident insurance of entrepreneurs and their employees. But they also watch over the avoidance of accidents at work, occupational diseases, etc.

The employers' liability insurance associations are assigned to different industries, including, for example:

  • the mechanical engineering and metal trade association
  • the professional association for food and restaurants
  • the trade association for trade and goods distribution

After registering the business, all traders receive mail from the tax office, which contains the tax registration sheet.

If you would like to register as a freelancer, please contact the tax office directly. In this case you do not need a business registration. The tax office then sends you the tax registration questionnaire, on which you provide all the necessary information about your activity.

Both as a freelancer and as a trader, you will receive your tax number or your sales tax ID from the tax office. You need this in order to be able to issue invoices.

At the tax office or in the tax registration form, founders can also state whether they would like to make use of the small business regulation.

The cooperative register is a publicly accessible and electronically managed register that provides information on the legal relationships of all German cooperatives. The legal basis for the cooperative register is the cooperative law and the regulation on the cooperative register.

As a founder, you will come into contact with the health department not only there, but especially in the catering industry. Because as soon as you work with food, you have to prove knowledge of the Infection Protection Act and in the area of ​​food hygiene, among other things. Your employees must also be trained accordingly. The health department is responsible for the regular control of the hygienic conditions in companies. Doctors, alternative practitioners, childcare facilities and others must also contact the health department when they settle down.

With the exception of freelancers, every founder must first register a business. This is usually done quickly at the trade office or district office (depending on the municipality), the costs are usually less than 40 euros. To do this, you need the completed business registration and any additional permits or certificates that may be required. Such can be, for example, an extract from the commercial register (when founding a general partnership or corporation) or the craft card. It is best to find out before the appointment which documents you need for your business registration.

The trade office then informs other authorities about the registration - such as the tax office, the district court, but also the responsible trade association as well as the chamber of industry and commerce or the chamber of crafts.

The trade supervisory authority is responsible for checking compliance with regulations in the areas of labor, environmental and consumer protection. So it controls whether you as an entrepreneur comply with your so-called "entrepreneurial obligations". If deficiencies are found during an inspection, the trade supervisory authority can issue a letter of revision, issue orders or even initiate coercive measures.

The tasks of the trade supervisory authority also include advisory activities as well as training and further education for works councils or safety specialists, for example. The trade supervisory authority should not be confused with the trade office.

What the IHK is for commercial enterprises, the Chamber of Crafts (HWK) is for the various trades. In the Central Association of German Craftsthe more than 50 chambers of skilled trades throughout Germany and other associations are united. The Chamber of Crafts acts as a representative of the interests of the craft and provides advice to its members.

The Chamber of Commerce and Industry (IHK) represents the interests of all traders in Germany. With the business registration your company automatically becomes a member of the responsible Chamber of Industry and Commerce. There is an exception for craftsmen: They have to register with the Chamber of Crafts instead of the IHK. Compulsory membership applies regardless of the size of the company. Since freelancers do not register a business, they are not members of the IHK.

The chambers of industry and commerce are represented at around 80 locations in Germany. They should promote the commercial economy of the respective region, but also regulate and review vocational training, carry out training and further training and much more. The Chambers of Commerce and Industry offer advice and training for start-ups.

A permit is required for some activities. This means that you need a separate permit, which is often issued by the public order office. You need such a permit, for example, as a real estate agent, as an insurance advisor, but also if you want to operate a gambling hall. There are also many other cases. The public order office also issues the restaurant license that you need to serve alcohol. In some cases, you first have to provide other evidence, such as an impeccable police clearance certificate or a so-called clearance certificate.

The partnership register provides information about the most important legal relationships of partnerships, which exist as a possible legal form for freelancers. Lawyers, auditors, tax consultants or doctors can come together in a partnership.

For many start-ups, membership in a chamber such as the IHK (Chamber of Industry and Commerce) or HWK (Chamber of Crafts) is mandatory. However, freelancers such as freelance lawyers, tax consultants or architects do not have to be members of an IHK or the HWK. There are independent professional chambers for them, the so-called registry chamber, with which they have to register as freelancers.

8. Conclusion: Safe to start up - with the start-up cockpit

Every start-up is different: for those setting up a business, a registration with the trade office is required, freelancers do it directly with the tax office. The tax office then assigns the tax number. Depending on the type of company, membership in the Chamber of Industry and Commerce, the Chamber of Crafts or a trade association is a requirement. The health insurance or artists 'social insurance fund, the employers' liability insurance association and the pension fund are responsible for supplying entrepreneurs and their employees. Depending on the industry, further permits must be obtained - for example from the health department, the public order office or the building authority.

In addition, there are a few additional aspects that are important in the process of setting up a business, e.g. a business account or the right insurance.

It is important to approach a start-up systematically and in a planned manner using our official guide and to take advantage of advisory services - so don't forget a contact point. Step by step to your own company with the start-up cockpit - with forms, checklists and contracts:

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Author: Für-Grü editors

As editor-in-chief, René Klein has been responsible for the content of the portal and all publications by Für-Grü for over 10 years. He is a regular interlocutor in other media and writes numerous external specialist articles on start-up topics. Before his time as editor-in-chief and co-founder of Für-Grü, he advised listed companies in the field of financial market communication.