Business Administration in Germany

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Setting Up a Company

Legal Business Entities

Types of Companies and Capital (Max/Min) Number of Partners/Shareholders and Liability Registration Fees
Gesellschaft mit beschrankter Haftung (GmbH) is a limited liability company
25 000 EUR minimum with at least half fully paid up at the creation of the company.
Minimum 2 partners
nb : 1 partner for a one person GmbH.
Liability is limited to the amount of capital contributed.
Minimum EUR 400 (+ possibly lawyer fees from EUR 600 to 800).
Aktiengesellschaft (AG) is a public limited company .
50 000 EUR minimum with a quarter fully paid up at the creation of the company.
Minimum 2 partners.
nb : 1 sole shareholder for a one person AG .
Liability is limited to the amount of capital contributed.
Minimum EUR 500 (+ possibly lawyer fees from EUR 600 to 800).
Offene Handelsgesellschaft (OHG) is a general partnership.
No minimum capital.
The partners can be natural persons or legal entities.
Their liability is joint and indefinite on the obligations and debts of the company.
Fees over 1,000 EUR.
Kommanditgesellschat (KG) is a limited joint-stock partnership.
No minimum capital.
There are two types of partners, the active partners and the silent partners.
The liability of the active partners is personal and indefinite.
The liability of the silent partners is limited to the amount of capital contributed.
Fees over 1,000 EUR.
Business Setup Procedures
Called "Satzung" for an AG, and "Gesellschaftvertrag" for a GmbH, the Articles of Association must be drawn up in a deed authenticated by a lawyer.
Company registration takes place at the Register of Commerce, held by the Clerk's Office of the Magistrate's Court where the company has its headquarters.
Branch offices must also be registered at the Register of Commerce in the place where they are to be set up.
The registration must be published in the " Bundesanzeiger" as well as in a journal of legal notices.Various declarations must be made after registration and especially to the fiscal administration ( Finanzamt) and social security organizations.
The Competent Organization
The Common register portal of the German federal states.
Search a Company or a Financial Report
Handelsregister, Common register portal of the German federal states
Ebundesanzeiger, in German

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Working Conditions

Legal Weekly Duration
Maximum 48 hours a week.
Retirement Age
65 years old
Working Contracts
The work contract is usually open ended with a trial period which may be up to 6 months. The contract may also be fixed term; it can be renewed 3 times maximum, and for a maximum duration of 2 years.

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Cost of Labor

Minimum Wage
There is no legal minimum wage. However, some occupations have had, in practice, a minimum wage since July 2007: building work (8.40 EUR to 12.40 EUR per hour), roofing (10 EUR per hour), painting (7.15 EUR to 10.73 EUR per hour), demolition (8.80 EUR to 11.60 EUR per hour), cleaning (6.36 EUR to 7.87 EUR per hour), electricity (7.70 EUR per hour for East Germany and 9.20 EUR per hour in West Germany).
Average Wage
Average wage is EUR 28,000 per year, ie EUR 2,000 per month.
Social contributions
Social Security Contributions Paid By Employers: 20.9 %
Social Security Contributions Paid By Employees: 20.9%

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Social Partners

Social Dialogue and Involvement of Social Partners
Unions are strong in Germany, however, the eastern side is more union orientated than the west.
IG Metall
Unionization Rate
22.3% in 2002
Labor Regulation Bodies
Ministry of Agriculture
Deutscher Bauernverband

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