Help, we are starting a company: corporation, bank and notary

My partner and I are currently in the process of starting a business. In the first part of my experience report, I described the initial situation and some background information. In the second part, I would like to share with you our experiences at the notary and in setting up the business account.

It is always said about Germany that it is not particularly friendly to start-ups – especially when it comes to setting up corporations. There is no easy way to start a business online.

Because in order to carry out the business registration and to obtain the tax number, you have to go to different authorities. Entrepreneurs also do not seem to be particularly well regarded in general.

Founding a corporation: The requirements

My partner and I have decided to found an entrepreneurial company, or UG. Incidentally, I will explain the reasons for this in the next column. The foundation of a UG, a modification of a GmbH, requires the certification of the foundation documents by a notary.

But getting one in Berlin is not that easy. This also applies if, as in our case, the foundation is to be based on the model protocol prescribed by the legislator. In response to the first inquiries by e-mail, a notary public referred to his “workload” in a very friendly but firm manner, which unfortunately made appointments impossible.

After that we called several notaries. Since we wanted an appointment within a week – it is of course a naïve assumption that a week’s lead time would be sufficient for an appointment of 15 minutes with a notary – we received five more rejections.

Eventually, however – big surprise – a notary was willing to “put us in the middle”. We are very happy, because the appointment could take place in three days.

We are founding: a ticking time bomb

The appointment, however, was rather sobering. After the notary’s greeting, the second sentence was (and I quote verbatim): “Then let’s found the ticking time bomb….”. When I asked, irritatingly, what he meant by that – I really thought I hadn’t noticed any innovation in the company law regulations – the answer came:

According to the model protocol, the formation of a UG does not provide for any regulations in the articles of association. This would already indicate the problems in a multi-person company like ours.

We then explained to the notary that we had thought carefully about the type of foundation and that I might have some knowledge of the circumstances of this UG formation due to my work as a commercial lawyer. There was no further verdict, but the skeptical look only disappeared after we had signed.

Words are weapons

As already written above, I will explain in the next column what were the reasons for our choice of the UG as a company form. And the notary is of course right: in abstract terms, a UG that is founded with the sample protocol is something that should be given careful thought.

This is especially true if, like us, you found a company with two partners. I will also explain that in the next column. Nevertheless, we could have been told differently.

I imagined how the notary’s statement about the “ticking time bomb” would have been received by others who, like us, are not familiar with the advantages and disadvantages of a UG. Instead of prudently enlightening us, before the notarization process starts, a saying is uttered that is not necessarily foundation-friendly. Maybe it was meant as a joke, but it didn’t work that way.

It does not have to be mentioned that there were no warm words regarding our future entrepreneurial position, that it is good that we want to try ourselves as entrepreneurs and that we are willing to take risks ….

Opening a bank account in Berlin

So, after ticking off the notary appointment, we had to face the next task, which was opening a bank account. We had the idea that it should be a local bank with branches. Here in Berlin there are currently many posters from a bank that advertises that if a company is here in the city, they would be the right bank.

That sounded good to us and we thought that we could try it there. The appointment with the notary ended at 3:30 p.m. and at 4:30 p.m. we were standing in front of the branch of this bank near our apartment in Berlin.

However, we had not inquired about the opening hours because we somehow assumed that this well-known bank in Berlin would certainly be open until at least 5 p.m. Wrong thought, this branch closes at 3pm, at least on Monday. Well, that was our mistake, we should have done better research.

Establishing a corporation: Welcome to the 21st century

Then on Tuesday my partner went back, because then the branch is open until 6 p.m. However, it is not possible to open an account for a corporation in the branch. We were told that we needed to call a specific phone number and make an appointment to open the account.

During this call, we were also told that we could get an appointment within three days. However, the account opening would then take about one to two weeks, and the documents would come by post.

The rescue then takes place online

After this sobering phone call, we then made short work of it and researched which bank online offers the opportunity to open an account for a UG quickly and easily. As part of the research, we are on “qonto“ encountered.

All information is entered online, our account was opened within 24 hours and after paying the initial contribution we had confirmation of the payment within another 24 hours, which we then forwarded to the notary’s office – after all, it was possible by email.

Founding a corporation: A sobering conclusion

Now it has to be said that all of this might not read as problematic. A lack of enthusiasm from the notary, coupled with a bad joke, and antiquated processes at branch banks are somewhere not worth mentioning. However, this description reveals various problems which, in my opinion, ensure that start-ups in Germany do not trigger any enthusiasm.

First of all, we need a more positive attitude towards start-ups and meaningful advice from those institutions that are the necessary evil when starting a corporation. The UG as such is not a bad form of company, and founding a multi-person company based on model protocol is not bad per se.

You should know what you are doing, but that is precisely the task of the notary to provide neutral information about it. After all, the Federal Chamber of Notaries has rejected the online form founding GmbHs and UG in Germany based on the digitization directive of the European Union.

Reason: Because allegedly only notaries could ensure the quality of advice in Germany. At least as far as our foundation is concerned, I have doubts about the quality of this statement. And there is also a need for action with regard to setting up a bank account.

Opening a bank account can take weeks

How can it be that setting up a simple bank account should take several days or even weeks? This is so unbelievably out of date that you want to scream. Entrepreneurs who have founded want to get started and not wait for a bank account.

My partner and I are incredibly happy that online banks are now stepping into the breach and offering appropriate services. If the branch banks don’t do something, they will have a hard time winning new, digitally savvy customers. In any case, this well-known bank in Berlin has already lost us.

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