If you want to start your own business, small business offers you an easy start. The legislator supports you here in various areas, for example by offering you relief in tax law and combining your bookkeeping with less effort. We will show you which requirements you have to fulfill in order to register a small business and how exactly the whole thing works.
What is a small business?
A small business is a trade that does not have any commercial characteristics. It is therefore subject to the German Civil Code (BGB) and not to the German Commercial Code (HGB). Whether this also applies to your business depends on various factors, including:
- Number of employees
- Size of the business premises
- Number of branches
- Quantity of business transactions
- Sales and profit
- Operating assets
- Financial reserves
For example, your turnover may not exceed 600,000 euros per year, to name just one example. As a rule, however, each case is assessed individually to determine whether or not a company meets the requirements for a small business.
Register a small business: Where do I have to go?
In order to register your small business, you need to visit your local trade office. This is absolutely necessary, because otherwise you will face high penalties. After your registration, the trade office will inform the tax office as well as the IHK or HWK. You no longer have to take care of this yourself.
What are the costs if you want to register a small business?
How deep you have to dig into your wallet when you register your small business depends on where you set it up. The costs range from around 10 to 60 euros, depending on where you live.
How long does it take to register a small business?
If you are well prepared, a small business registration is done quickly. It is important that you have all the necessary documents at hand and that you have filled out all the forms correctly. Then your registration will only take a few minutes.
Register a small business in 10 steps
Your path to small business begins at the trade office and ends with the establishment of your business premises. Read here which stations you have to pass if you want to register your small business!
1. your visit to the trade office
Before you go to the trade office, first gather all the necessary documents. What you absolutely have to have with you is, of course, your identity card. If you do not have German citizenship, then you must present your residence permit. Depending on the industry in which you work, the Trade Licensing Office may require a certificate of good conduct from the police. This is the case, for example, if you would like to open a store for the purchase and sale of cars, watches or other high-value goods or a key service.
In some cases, certain qualifications are also required. In many trades, for example, a master's degree is required before you can register a small business. In addition, industry-specific permits may be required, for example, if you work in the catering industry or start a driving school.
Of course, the business registration itself should not be forgotten. You can obtain the necessary form "GewA1" from your local trade office. It is valid for all legal forms. In it, you provide information about yourself and your future business. Among other things, you describe the services you offer or what you sell and state whether it is a sideline business. You also inform the Trade Licensing Office where you will be conducting your business, whether you will be employing staff and more.
2. opening a business account
Once you've made it through the visit to the trade office, you've already cleared the first important hurdle. Now you are faced with the question of whether you want to open a business account. Although this is not mandatory, it is highly recommended. This way you can strictly separate private and professional funds and it will be easier for you to keep track of them.
When choosing the right bank, you should pay attention to the basic fees and transaction costs. Another important factor is whether the bank offers debit and credit cards.
3. your first contact with the tax office
The trade office has already registered you with the tax office. They will now contact you and ask you to fill out the questionnaire for tax registration. Here, too, you provide information about yourself and your business and describe exactly what your activity will look like. To do this, you create an account in the online portal ELSTER, where you can also fill out and submit your tax return online in the future.
Once you have filled in and sent the questionnaire, the tax office will assign you a tax number, which you will have to indicate on all your invoices, among other things.
4. regulate your tax affairs
In the questionnaire for tax registration, the tax office wants to know whether you have a tax advisor. This determines, for example, when you have to submit your tax return and whether you can deduct his payment from your taxes. So now is the time to think about whether you want to get professional support on board.
A tax consultant costs money, of course. So it's often a financial question as well. However, if you make rough Error in tax matters, it will cost you much more. Do you have enough time to read up on all the necessary knowledge or do you perhaps already know your way around? Then you can do without a tax advisor as long as you feel confident.
On the other hand, have you never been afraid of taxes and just can't get your head around them? Then you'd better get a professional on your side. He not only takes care of your tax return. He'll also take care of your advance tax returns and bookkeeping, taking an incredible amount of work off your hands.
5. register small business: Organize the accounting
When it comes to taxes, accounting is not far behind. Managing receipts, writing invoices, monitoring costs - all of this takes up an incredible amount of time. The more in demand your business becomes, the harder it will be for you to take on these tasks yourself in the long run. After all, the highest accuracy is required here, because even small mistakes can cost you dearly. With accounting software, you can automate the processes.
6. become a member of the IHK or HWK
Depending on the industry in which you operate, you are required to become a member of the Chamber of Industry and Commerce or the Chamber of Crafts. If you operate a commercial enterprise, the Chamber of Industry and Commerce is relevant for you; if you represent the skilled trades, the Chamber of Skilled Crafts is relevant. The tax office has already informed the relevant chamber for you.
As part of the CCI, you will then receive a letter with all the important information about your membership and your annual dues. They range from around 30 to 75 euros. If your annual profits are less than 25,000 euros, then no contributions are due for the first two years.
If, on the other hand, you become a member of the HWK, your trade will be entered in the register of skilled crafts. This is a list of all owners of a craft that is subject to registration. You will then receive your craftsman's card.
7. register with the employers' liability insurance association
If you want to register a small business, you have to register with the employers' liability insurance association. They are dedicated to the health aspects of your business and are responsible for statutory accident insurance, among other things.
After your start-up, you have one week to register there. As soon as you start employing staff, you must pay contributions to the employers' liability insurance association. As the owner of the business, you can also insure yourself voluntarily.
8. contact the employment agency
If you want to employ people in your company, the first step is to go to the Employment Agency. You need a company number, which you can apply for there. You will need this number to register with the social security authorities. Even if you only employ mini-jobbers or only take on trainees for the time being, you will need a company number.
9. take care of the insurances
Not only do you have to take care of your employees' insurance, but also your own. As a small business owner, you are not required to pay social security contributions. This means that you can take out private health insurance and do not have to pay into the German pension scheme, although the latter does not apply to craftsmen.
Now you have to weigh up which insurances are suitable for you. You have the option of taking out voluntary statutory health insurance if private insurance is not an option for you. You can also join the German pension insurance voluntarily. Alternatively, you can choose a private pension plan. The rule here is: Think about tomorrow today! Even if you think you don't need to make provisions now because you're still young, you shouldn't let yourself be seduced by this thought. You will thank your younger self later for thinking about the future early on.
Other insurance policies worth considering include:
- Unemployment insurance
- Occupational disability insurance
- Legal expenses insurance
Your insurance needs will vary depending on the industry you work in. If you are a roofer, you will probably want to insure yourself more extensively than if you run a fashion store.
10. find out about other offices
Depending on the industry and the project, you will sooner or later come into contact with other offices. At the top of the list is the trade supervisory office. It checks whether you comply with the occupational health and safety regulations in your company and also monitors environmental protection measures. If you fail to do so, you will be subject to fines.
If you run a catering business or sell food, you will also meet the employees of the health department. They monitor food hygiene and will also contact you if there is an outbreak of highly contagious diseases in your business.
If you want to convert your business premises at some point, you must first inform the building authority. Even if the premises belong to you, this unfortunately does not mean that you can convert them as you wish. You must apply to the building authority for all projects and then wait for approval or rejection.
Register a small business: Now you can get started!
Congratulations! You've mastered all the stages on your way to starting your small business, and now you can finally get going. So get to work and set up your business premises, create your website and start running towards success!
Register small business and work independently: Advantages and disadvantages
Not everyone is cut out for self-employment, that's for sure. If you want to register a small business, you take on a lot of responsibility. It is up to you whether it successful will be or not. At the same time, you give up regular employment and a regular income. Especially in the early days, when you can't be sure whether you will make enough sales, this can be difficult. Sufficiently large financial reserves should therefore be available.
Don't forget that you also bear the full legal responsibility. If something is wrong with your products, if you have forgotten a registration or even made a mistake in your statements to the tax office, this can cost you dearly. So be sure to surround yourself with professionals who can help you with all of this and advise you.
If you work conscientiously, are courageous, ambitious and not afraid to face challenges, then the Self-employment just the right thing for you. It gives you the chance to grow and finally live your dream. It allows you to shape not only your personal life, but your professional life as well, and finally work according to your moral compass. So every day you can help make the world a better place and drive innovation.
This is exactly what you have always wanted and you finally want to register your small business? Then help you Business Coach Skills to successfully complete the journey. So full throttle ahead!