Capital for the Company

Here we want to answer various questions about money / banks / director's salary when taking over a company.

 

It is about:

  1. All about taking over Qonto's account
  2. Takeover in Cash
  3. Takeover in Kind
  4. Special Features for a UG

 

Anything about taking over the account from Qonto

What does Qonto expect from a client?

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The online bank Qonto aims to provide its users with the best banking experience – simple and efficient, from account opening to daily use. In principle, all Europeans and non-Europeans with electronic residence permits are welcome to get an account with Qonto Bank. If you do not meet these requirements, you may be eligible for our escrow services. However, the decision is with Qonto not Beam!

How do you help me with taking over the shelf company's account?

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You do not need to do anything to take over this account. We submit the documents about the new company and the involved persons to the bank. We also invite you as a new "member" of the account's dashboard. You can then delete us as the account owner. The checking account will then be all yours.

I have a valid residence permit for Germany. Why do I not get an account?

Do you have an electronic residence title? Presumably, you have a sticker in your passport. That's just an "analog" residence permit and may not be accepted by Qonto Bank. You will need a trustee in your business. You need to be able to rely on your escrow agent. Otherwise, you will have to find another bank.

Takeover in Cash

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Can the funds for the company be used immediately or is it gone forever?

You can use the money elsewhere after the company is financially equipped, but this must be carefully structured! The start-up capital is now no longer their money; it now belongs to your company. It is comparatively like giving money to your brother. You can easily use the funds for the daily needs of the company. If you want to avoid personal liability, it is not allowed to return the capital to the shareholder.

Do I have to have a German bank account?

No, this is not actually necessary - all that is important is an IBAN. Payments to German offices are always cashless. However, there might be problems with direct debits. Depending on the founder's nationality, it may be more or less easy to open an account.

For which nationalities is it difficult to open a business account?

Typically, nationals from countries known for shadow economies will have problems living abroad and wanting to open an account. Unfortunately, American nationals also fall into this "difficult" nationalities category.

American citizens have a problem opening a business checking account in Germany? You've got to be kidding me! In the States, we've been told all the time how great the U.S. is.

Yes, sad as it may sound, this is true. However, this has nothing to do with past presidents, but refers to FATCA; a law that has been in effect for some time.

Why do you have to collect the fees from the authorities when buying remotely? This makes your offer seem very expensive!

Quite simple! We want to support you and speed up the process. Payments within Germany arrive faster. We control the correctness of the fees and enforce the correct ones with the authorities if necessary. One detail less you have to worry about. Especially the notary will be happy to know that his payment is secured. He will then be all the more ready to prepare the purchase brokered by us. Otherwise, both the notary and the commercial register will each expect payment first before anything is implemented. It is simply more difficult to sue a person for fees if he lives abroad.

I want to have a GmbH and I find out that I can also pay half of the share capital. That's great! When do I have to pay in the remaining capital?

You may never have to pay it! There are only three situations when this money is required:

  1. when the other shareholders demand it,
  2. when the bankruptcy trustee reaches out his hand,
  3. when there are insufficient funds in the company's liquidation.

As managing partner, does my company have to give me an employment contract immediately? After all, we have not yet turned over any money as a young company. I still have savings and can live well on that for the next while.

If the tax office asks you this, there is nothing wrong with it. The authority just wants to know "if" or "if not". There is no obligation that you have to employ yourself at all. When you give yourself an employment contract is an economic question that you should consult with your tax advisor.

What is the difference between capital stock vs. capital contribution? The notary spoke so fast that I only understood half of it.

"Capital stock" and "capital contribution" are easily confused or equated. The difference is quite simple: the "share capital" includes the total liability capital of a company, whereas "capital contribution" means the share of an individual shareholder in a GmbH or UG. At the time of formation, each shareholder can also take over one or more shares. Each share has a nominal amount, which expresses the value of that share in the company. In such a case, the sum of the nominal amounts of all shares of a shareholder is his capital contribution. If you add up all the capital contributions of the individual shareholders, you get the share capital. Is quite logical, is not it?

Takeover in Kind

I don't have that much spare cash but I have many valuable items. Can't I deposit the capital contribution with stuff instead of cash? That would really make my life easier!

Yes, you can. From a purely legal point of view, it's not a problem. But it might be expensive! Funding in kind is possible only if you determine this in the articles of association. This thing must be described quite precisely. The items being contributed must be evaluated by an auditor. You can contribute following things into a company:

  • Real Estate,
  • Vehicles,
  • Machinery,
  • Interests in other companies,
  • Rights of use,
  • Licensing rights.

The Articles of Association state that a "hidden contribution in kind" only has a fulfillment effect if, from an economic point of view and on the basis of an agreement made in connection with the assumption of the monetary contribution, it is to be valued in whole or in part as a hidden contribution in kind if it meets the requirements of the value imputation pursuant to Section 19 (4) GmbHG. Aha. What is that supposed to tell me, please?

It is ultimately about the fact that the company should really receive the capital really for free disposal. The legislator wants to prevent that a worthless object, the monetary contribution to be bypassed.

What do I care about this obligation? What are the consequences if I don't raise the capital properly?

If shareholders and managing directors violate cash and non-cash regulations, they face fines and imprisonment under §82 GmbHG. "Concealed contributions in kind" and "paying money back and forth" are typical liability traps.

Paying money back and forth? Why not just have the corporation loan me the money again?

A back-and-forth payment exists if, before the contribution is made, it is agreed with the shareholder that the company will make a (counter)payment to the shareholder. A typical example: The shareholder receives a loan from the GmbH in a timely manner. Pursuant to §19 V GmbHG, the shareholder is only released from his obligation to make a contribution if the company has a full (!) repayment claim against the shareholder. A repayment claim exists if this loan is due at any time or can become due by termination without notice. If this is lacking, the shareholder still owes his contribution.

When and how is a contribution in kind to be made by the company?

If contributions in kind are to be made, there are two special features: The contribution in kind must always be made in full. The value of the contribution in kind must be proven in a non-cash incorporation report. This is what makes the formation so expensive, because auditors have to be commissioned with the valuation.

Special Features for a UG

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Okay, I understand with the UG I am allowed to set up the reserve must. What am I allowed to do with it anyway?

The reserve may only be used for.

  1. the capital increase from company funds
  2. .
  3. the compensation of a net loss for the year, insofar as it is not covered by a profit carried forward from the previous year
  4. .
  5. the offsetting of a loss carried forward from the previous year, insofar as it is not covered by a net profit for the year
  6. .

 

How much should I pay in capital for my UG? Is a single euro really enough? After all, that's not enough to survive!

To admit, that is not enough at the back and front for the existence of a society. Unfortunately, the answer is somewhat complex. The law requires at least one euro - so §5a GmbHG and logically up to € 24,999. However, from € 12,500 a UG no longer makes sense, because then you have the money for a GmbH together.

notary has downright refused to found my UG with one Euro share capital. I feel that this is an impertinence. What can I do about it?

The notary will certainly, have argued with the following advice. You should bring in as a founder enough money as a contribution, so that the company can generate sales in a certain period itself and is self-supporting. Inadequate security with sufficient share capital can always entail a risk of insolvency. Consider therefore: A managing director is in principle obligated to submit in time with insolvency an insolvency request.
There is some truth in this. However with a business startup I feel this argumentation as fact and sense-incorrect. According to this logic, someone who starts as a freelancer would have to do so only with a permanent client. Otherwise, he could also have to file for insolvency. Why is it then permissible to start up from unemployment?
If you do not get on with the notary, then you are welcome to complain to the Chamber of Notaries in the state of your notary. That is their right.
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Can I form a UG with a contribution in kind?

Sorry, that is excluded by law (§5a II 2 GmbHG)! No, an exception is also not possible.