Registered Businessman / Registered Businesswoman (e. K.) – Foundation, Financing, Liability & Co.
Eingetragener Kaufmann (e. Kfm.) / Eingetragene Kauffrau (e. Kfr.) / Registered merchants (e. K.) – The registered merchants embody a German legal form variant, which is based on the corporate legal form of the sole proprietorship (EU). This means that it is a company that is founded and managed by a single person and is also obliged to be entered in the commercial register – hence the name. Learn everything important about it here! In addition, you will find all German company types and legal forms, as well as tips for founding a company, including the special case of real estate GmbH, family foundation & Co.
Registered traders (e. K.) – foundation, financing, liability & Co.
With regard to the legal form of sole proprietorships, a distinction is made between freelancers, small traders and registered merchants, with the latter being the only legal form variant that must be registered in the commercial register. However, the obligation to register only applies to merchants who are actively engaged in commercial trading – the so-called “gewerbetreibende Kaufleute”. They are also referred to as “actual merchants” and are generally assessed according to the German Commercial Code (HGB).
If you are a sole trader and own a business but do not trade in it, you are considered an “optional trader” and have the choice of whether or not to have your business registered in the commercial register. If you decide not to register, you are subject to the German Civil Code (BGB) as normal. Typical “Kannkaufleute” are, for example, small traders and freelancers.
You can find out more about the individual legal forms here:
Foundation & Company Name
In comparison to the other two legal forms, the strictest requirements apply to the establishment of a company for commercial traders: In addition to applying for a tax identification number (tax ID) at your tax office and registering your company at the trade office, you are also required to have an entry made in the commercial register by a notary. At a cost of around 200 to 300 euros, you can thus secure the title of actual businessman or businesswoman. Only after completing this public registration do you have your own company in the legal sense.
You are free to choose the type of company name in many respects, but it must provide information about your commercial status and also be distinguishable from the companies of other traders. You can form a personal company, which describes you as the owner in more detail, or a material company, which reveals more about your business purpose and the associated services, or even a fancy company… It is obligatory that you add the gender-neutral suffix “e. K.” – or alternatively “e. Kfr.” for registered businesswomen or “e. Kfm.” for registered businessmen – to the contingent liabilities of your sole proprietorship. In addition, you can consider registering your company and/or your business name as a trademark to protect your name or your company.
Financing & profit distribution
No minimum capital is required to set up a business as a registered trader. Of course, it is still advisable to have some reserves and to draw up a financing plan in order to be financially prepared in case of unpleasant surprises. In addition, you will incur some costs for the start-up alone, before you have even begun to make a profit with your company. The positive aspect: Your profits are 100 percent yours and you don’t have to share them with anyone!
Liability, accounting & taxes for registered traders
As a sole trader, you have unlimited liability, i.e. with your business assets as well as with your personal assets. By registering, you are obliged to keep accounts and regularly prepare balance sheets and inventories for your business. However, you are exempt from the obligation to publish your business figures and books. Unless you achieve an annual turnover of more than 130 million euros…
A sole trader is always a natural person at the same time. Consequently, registered traders are, of course, first and foremost subject to income tax. In addition, according to tax law, further levies are provided for turnover tax and trade tax.
Registered trader (e. K.) – For whom is it worthwhile?
Do you love the idea of being your own boss and not having to coordinate decisions with other shareholders or managing directors? Then the legal form of a trader could be just right for you! Uncomplicated formation process, zero minimum capital required and no partners, co-founders or shareholder teams to nag you or interfere…. You take the risk and you reap the rewards – 100%.
Why should you register as a merchant? The legal form of a registered businessman (e. Kfm.) or registered businesswoman (e. Kfr.) is worthwhile for those who are prepared to take manageable risks in order to start their own business quickly and easily. You do not need enormous financial reserves and also pay relatively little tax on your profits. A sole proprietorship is therefore ideally suited for young entrepreneurs who not only dream of self-realization, but also want to take their lives into their own hands.
Alternatives to the e.K.: Legal forms in Germany
Legal forms – What types of company are there? If you want to start your first company, then choosing the ideal legal form is one of the first steps in the process of setting up a company. Whether it’s a special real estate company or a start-up, I’ve summarized all the types of companies in Germany for you here.
Company types in detail:
- Sole proprietorship
- Civil law partnership (GbR)
- General partnership (OHG)
- Limited partnership (KG)
- Entrepreneurial company (UG)
- GmbH: Limited liability company
- Real estate GmbH / Asset management GmbH
- Stock corporation (AG)
- Real estate stock corporation (REIT-AG)
- Societas Europaea (SE)
- Foundation / Family Foundation
