Why did that need limited liability though? In Germany you'd just become an entrepreneur with a simpler company type without limited liability.

Do you want to take the risk of losing your home just to start a business?

Maybe the real difference is that such things might be possible in the US, but sound laughable in Europe?

What would you need to mess up to be liable for huge sums as a single consultant company?

It’s unlikely you’ll lose it all, but suppose you write a clever app — maybe a cvs editor.

Suppose you find out your cvs editor infringes on a patent and you’re liable. Suppose some business suffers data loss and sues. These things do happen in Europe too.

Also, it’s just a matter of professionalism. A sole proprietor isn’t very professional and many medium-size businesses won’t do business with sole proprietorships.

You can probably get insurance for that.

The UK is in Europe and it is easy to found an LLC. In the UK for example, there is no capital requirement at all. That's a lot les than 25k€.

_Was_ in Europe.

What continent did they move to instead?

Europe is a continent. They're not in the EU. If being in the EU is a requirement to be in Europe: that means Switzerland is not in Europe?

Fair enough - I meant to say: for business reasons, a UK LLC won’t do you much good in terms of hassle free company setup inside the European Union.

The discussions is not about setting up an LLC in the EU, but specifically in Germany. Subsequent to that we are comparing this with other developed countries in the world, not all of which are in the EU, which is fine, and does not undermine the comparison.

Where did they move to? I heard something about them leaving the EU, but Europe?

There’s tax benefits and other business-only products that require a business entity.

Imagine if you’re a consultant and for whatever reason, you get sued or worse. That’s what the LLC is for.

Personal insolvency sucks, but you won't actually loose your home here in Germany.

> Personal insolvency sucks, but you won't actually loose your home here in Germany

Germany insolvency can take a decade, make getting a flat or even keeping your bank account a challenge and rarely results in debt relief to boot [1].

[1] http://www.privatinsolvenz-hilfe.org/en/german-bankruptcy-la...

You couldn't have found a shadier source pushing FUD, if you tried to.

Which does not change the fact that the process takes a decade.

So your liability is limited. That’s like asking why you need a seatbelt.

You can get the simple company type (disregarded entity) and all the advantages of limited liability with an LLC.

As explained in the article, if you don't have 25k€ of capital, then you open an Einzelunternehmen (sole proprietorship), not a GmbH (LLC). It's a much simpler process.

There are a lot of reasons not to form a sole proprietorship. You have personal liability, for one.

A GmbH is not like an LLC, it's more like a Delaware C-Corp. People forget this all the time.

Why Delaware?

Delaware is a popular state for incorporation in the United States due to its favorable corporate laws and established legal precedents. A C-Corporation (C-Corp) is a type of business structure that is a separate legal entity from its owners (shareholders). Shareholders have limited liability, and the corporation itself pays taxes on its profits. This is different from an LLC, where the owners report the profits and losses on their individual tax returns.

You can also create an UG (haftungsbeschränkt) which is basically a GmbH with the 25k€ requirement removed. The only drawback is that this can make the operation look less trustworthy, depending on whom you are dealing with.

If you are selling Hot Dogs, nobody will bat an eye if it’s a UG, but if you apply for a big software contract, people might be wary.

Presumably the UG is still preferable to being a sole trader when dealing with much larger customers. Is that right? Or does providing services in your own name come across as more trustworthy to those parties?

I'm skeptical that an at most 25k€ recovery would alleviate weariness of a big software contract without additional due diligence.

It seems to me that a sole proprietorship would do more to protect against counterparty risk, i.e. more of the person's assets would be available to satisfy the debt.

My guess is that counterparties prefer a limited liability partner to arguably insulate themselves from employment liabilities.

Can confirm, did the form online in Berlin, super easy and quick.