Types of new businessBusiness people
A business is (almost) every self-employed activity from which one earns money. For example, traders, caterers, craftspeople or producers of goods are business people. On the other hand, people setting up in business who work on a self-employed basis in one of the liberal professions or in agriculture or forestry are not categorised as business people.
You should observe the following points:
You should first ascertain whether you need a permit or licence or need to take a test of your specialised skills. The chamber of industry and commerce will provide information.- If you are planning an activity in the crafts sector or something similar, you need to have yourself registered on the Roll of Craftspeople (Handwerksrolle) or in the register of activities similar to crafts (Verzeichnis der handwerksähnlichen Gewerbe) at the Chamber of Crafts (Handwerkskammer).
- You are required to be a member of the chamber of industry and commerce or the chamber of crafts.
- You are required to inform your tax office (Finanzamt) of your profits in the form of a balance sheet comparison (annual account with profit and loss account) and a statement of assets and liabilities.
Registration:
If you have all the necessary documentation, you should register your company at the Trade Office (Gewerbeamt) in the municipality in which you wish to open your business. The Trade Office will inform all the other authorities which are involved in your act of establishing a business (e.g. tax office, accident insurance fund, local court).
Liberal professions
The liberal professions include the “catalogue professions” [Katalogberufe].
These are:
- Healing professions:
doctors, dentists, vets, non-medical practitioners, physiotherapists - Legal, tax and business advisory professions:
attorneys, patent attorneys, notaries, accountants, tax consultants, tax agents, business consultants, certified auditors and account revisors - Scientific/technical professions:
surveyors, engineers, commercial chemists, architects, pilots of waterborne vessels - Linguistic and information-transmitting professions:
journalists, image-based reporters, interpreters, translators
In addition there are also (according to the Act on the Partnerschaftsgesellschaft (PartGG)):
- psychologist (Diplom-Psychologe)
- medical masseur
- midwife
- full-time expert (Sachverständiger)
Similar professions: The definition of liberal professions includes a number of occupations similar to those of the catalogue professions: The key point is that the training and the specific professional activity must be similar to a catalogue profession.
The “activity” professions (Tätigkeitsberufe): The liberal professions also include scientific, artistic, authorial or teaching occupations when engaged in on a self-employed basis. Whether or not they are categorised as liberal professions has to be decided on a case-by-case basis.
You should observe the following points:
- The field of activity is what counts, not the qualification. An architect running a construction firm or a lawyer heading up a manpower agency will not – normally – be a member of the liberal professions.
- Ultimately, the tax office decides whether the activity is “commercial” or is categorised as a “liberal profession”.
- Members of the liberal professions do not pay trade tax.
- Some members of the liberal professions are required to be members of their respective chamber. Also, a number of liberal professions have to observe special professional rules.
- You will need to inform your tax office of your taxable profit, generally in the form of a revenue surplus calculation.
- If you set up a non-incorporated company, i.e. a GbR or a Partnerschaftsgesellschaft, with other members of the liberal professions, each shareholder must dispose of specialist knowledge. If one of the shareholders does not dispose of the requisite specialised knowledge, and therefore does not count as a member of the liberal professions, or if one of the shareholders is an incorporated company (e.g. GmbH), the company will be regarded as a commercial operation. If you establish an incorporated company with other members of the liberal professions, this will always be categorised as a commercial operation, irrespective of the field of activity of the shareholders.
Registration:
Freelances do not register with the Trade Office, just the tax office. The tax office furnishes them with a tax number.