Starting a Business

Registering a Business

Distinction between a Trade and a Liberal Profession in Germany

If you want to operate a business, you must always notify the Trade Licensing Office ('Gewerbeamt') before starting up.
Before your business can be registered, it must first be established whether the planned activity actually comes under the heading of a trade activity. It means that you should consider whether you will be operating as a trader or a member of the professions. This is important, because if you are not operating as a trader ('Gewerbetreibender'), you do not need to register the business with the Trade Licensing Office ('Gewerbeamt'). The terms ‘Liberal Profession’ and ‘Self-Employment’ are often confused: both traders and members of the professions are self-employed, but not every self-employed person is a member of the professions.
Under Art. 1(2) PartGG (German Partnership Act), a profession “...is generally practised on the basis of a specific professional qualification or creative talent” and can be defined as the “personal, autonomous and professionally independent provision of services of a more elevated nature in the interests of the customer and/or the general public”. However, the decision about whether or not one is actually practising a profession is made on a case-by-case basis.

Who is Required to Register?

First of all, in order to be required to register the business with the Trade Licensing Office ('Gewerbeamt') you have to operate as a trader.
Furthermore, the requirement to register depends on the legal form adopted by the Company:
  • If an individual runs a business, e.g., a sole proprietor, he is personally obliged to register.
  • In the case of a business partnership (Personengesellschaft), all personally liable partners authorised to represent the company must register together. In the case of a civil law partnership (BGB-Gesellschaft (GbR)) or a general commercial partnership (OHG), this usually refers to all the partners, and in the case of a limited commercial partnership (KG) to all of the general partners. In the case of a GmbH & Co. KG (a special form of limited commercial partnership (GmbH)), the GmbH represented by its managing director must register.
  • The managing director(s) of a GmbH is/are responsible for registering, as is the board of a joint stock company (AG).
  • In the case of individuals and companies listed in the Commercial Register, the trade authority will generally require an extract from the Commercial Register to be submitted at the time of initial Registration. 

Special Cases

The obligation to register your business applies as a matter of principle to businesses operating from fixed premises, which are a basic form of commercial activity run from a commercial establishment (business premises, shop, permanent sales stand, etc.). Itinerant traders (e.g., door to-door salesmen and street traders) must also be registered, as must market traders, i.e., those taking part in trade fairs, exhibitions and markets (e.g., selling at weekly markets or funfairs).

a) Special Rules Relating to Crafts and Trades

In the case of crafts and trades, the trader must ensure that the business is registered with both the regulatory agency and the Register of Craftsmen (Handwerksrolle). A Master’s Certificate is a prerequisite for entry in the Register of Craftsmen. The proprietor of a business must personally have passed the master craftsman’s examination; in a business partnership, one of the partners with personal liability must have done so. In the case of a GmbH, this certificate must be held by either the managing director or a technical operations manager who does not have to be a managing director.

b) Special Case: Itinerant Trades

In case you do not want to operate from fixed premises you probably plan to start Itinerant Trades. Itinerant trades include hawking goods and running one’s own stall at a private market.  Anyone wishing to practise an itinerant trade will require a permit under the Industrial Code, known as an Itinerant Trader’s Licence (Reisegewerbekarte). They will also need a special use permit or special dispensation if they want to trade on public thoroughfares.

c) Other local authorities you have to contact: Special Use Permit

Many traders are willing and able to extend their business activities beyond the four walls of their retail premises. Often – especially during the summer months – they wish to set up tables, chairs or flower tubs in front of their café, restaurant or shop. If this encroaches on a public thoroughfare, they will generally require what is known as a ‘Special Use Permit’ (Sondernutzungserlaubnis).

Circumstances for Notifying the Regulatory Agency

If you are operating from fixed premises, you must notify the regulatory agency of the following circumstances pursuant to Art. 14 of the Industrial Code (GewO):

The date on which trading begins

You must register your business when you first start to undertake your commercial activities. This may mean the date on which you first promote your business, rent suitable premises, purchase goods or recruit employees.

Changes of business address

If you move to new premises – even within the same locality – you are moving your business and must register the new address. In Berlin, this must be done at the regulatory agency (Ordnungsamt) in whose jurisdiction the new place of business is being established. If you move your business from one municipality to another (e.g., from Berlin to Potsdam), you must have it deleted from the register of the original municipality and then registered in the new one.

Changes of business activity or expansion into other areas

The object of a business changes if, for instance, it transitions into another sector (such as a textile retailer becoming a furniture retailer instead). Changes within the same trade sector, such as a shift from retail to wholesale or adding a retail operation to a wholesale business, would be included in this. Whether a change in the goods or services on offer would have to be registered would depend on what was customary in the sector and in that particular locality, and the nature of the original business. In case of doubt, the CCI or the relevant regulatory agency (Ordnungsamt) should be able to help.

The closure of the business

This is when a business is wound up once and for all. Partial closure does not have to be registered; neither does a temporary cessation of business on seasonal grounds, etc.
In all four cases, the duty of notification applies to head offices, independent branches and dependent branches. Dependent branches include distribution warehouses and collection points (e.g., for laundries) and branches established by foreign companies, provided they are not merely exploring the market, but are also signing contracts or providing customer services. There are forms available for the different types of registration; these contain additional information. They can be obtained from the trade authorities (and in the case of Berlin, from the local authority departments (Wirtschaftsamt or Gewerbeamt of the Bezirksamt). The trader will receive a copy of his registration document certified by the authority. This receipt voucher is generally referred to as a Gewerbeschein (trade licence).