That’s exactly what the UG (haftungsbeschränkt) does, you can set one up with (theoretically) 1€ (though in practice it’s more like 250€), and you then have a GmbH with lower liability

Yeah but pay many thousands per year for filing taxes etc and spend years to dissolve. Along with all the personal liability as director.

UG is a massive scam in that sense, definitely not what’s advertised.

And that’s exactly why a UG doesn’t look trustworthy to most business partners

Well, isn't that exactly what is happening if you set up a US LLC or a UK LTD? You get limited liability and can set up the company with a couple hundred dollars or pounds. Why would that be a problem in Germany but not in these jurisdictions?

You can set up a UG for quasi nothing in Germany and it would be roughly equivalent to a US LLC or UK LTD with no capital. Thing is that almost no one does and the reason is that it is hard to do business as an UG because lack of trust as GP said.

I can't tell you why it is like that in Germany, but I'm curious why it isn't like that in the US and the UK.

(german here and part time owner of a business as GbR - a rock band). I think it clearly comming from another tradition, businesses in germany start as person/owner funded than as externally funded. But the mentioned UG was to help change this state. Still, most partners/contractors would like to see a GmbH.

The UK hasn't got something similar to UG because it does not need to.

They made Ltd companies simple and cheap so that there is no need to complicate things like in Germany and most European countries.

Since the vast majority of companies are Ltd companies there isn't any connotation attached to them. You can just look the company up to check how old it is and to convince yourself of its 'trustworthiness'.

IANAL but I think the answer for US single-member LLCs is that if you were ever to actually say, cause 100k of damage to somebody else's property through the actions of your single-person LLC and they were to take you to court, the judge would quickly find that the liability passes through to you, so it's not really all that different from a sole proprietorship (aka just doing business as yourself) in that regard.

I am also not a lawyer but for me it doesn't seem to be that easy to pierce the corporate veil https://www.nolo.com/legal-encyclopedia/personal-liability-p...

In the US you’re responsible for your own personal actions regardless of LLC existence or not.

If you’re selling a product, the LLC should protect you from liability caused by the product. (With many caveats)

But the LLC won’t protect you from your personal actions