Digitization has revolutionized numerous business processes, including company formation. In Germany, incorporating a limited liability company (GmbH) or an entrepreneurial company (UG) has traditionally involved significant bureaucratic efforts, including physical presence before a notary. The introduction of online incorporation aims to simplify and modernize these processes. This article examines the legal requirements and procedure for online incorporation of a GmbH or UG in Germany, with a particular focus on the challenges and practical difficulties, especially for foreign investors.
Legal Framework
The legal framework for the online incorporation of GmbHs and UGs was established by the Act Implementing the Digitalization Directive (DiRUG), which came into effect on August 1, 2022. The aim of this law is to enable the digital incorporation of companies and reduce bureaucratic burdens.
§ 2 Abs. 1a GmbHG (Introduction of Online Incorporation)
The new § 2 Abs. 1a GmbHG regulates the possibility of online incorporation of a GmbH. This paragraph allows the notarial certification of the articles of association to be carried out via video communication. This applies to both the traditional GmbH and the UG (haftungsbeschränkt).
Requirements for Online Incorporation
1. Use of a Qualified Electronic Signature Procedure
One of the key requirements for online incorporation is the use of a qualified electronic signature procedure. According to the eIDAS Regulation, all documents submitted during the incorporation process must be signed with a qualified electronic signature. This ensures the legal certainty and authenticity of digital documents.
2. Identity Verification via Video Communication
Another essential element of online incorporation is the identity verification of the founders by the notary via video communication. During this process, the identity of the participants is verified through a video call where a valid ID or passport must be presented. This replaces the previously required personal presence before the notary.
3. Electronic Submission of Incorporation Documents
All required incorporation documents must be submitted electronically through the online portal of the competent registry court. This includes the articles of association, the shareholders' list, and any additional necessary documents such as the appointment of managing directors.
Technical Challenges and Practical Difficulties
1. High Technical Requirements
The technical requirements for online incorporation present a significant hurdle. Founders need a qualified electronic signature, issued by a trusted provider. The process to obtain this signature is complex and requires reliable technical infrastructure. Founders must register with a trusted service provider, acquire a qualified certificate, and use the necessary hardware, such as signature card readers or hardware tokens.
2. Limited Availability and Compatibility of Hardware
The availability and compatibility of the required hardware pose another problem. Not all founders have the necessary technical equipment, and acquiring suitable devices can be time-consuming and costly. Signature card readers and hardware tokens, in particular, are specialized devices that are not readily available everywhere.
3. Identity Verification for Foreign Investors
Identity verification via video communication is particularly problematic for foreign investors. Many trusted service providers and notaries in Germany rely on national identity documents and are not always able to verify foreign documents. This results in many foreign investors being unable to obtain the qualified electronic signature required for online incorporation.
Limitations for Foreign Investors
Due to the technical challenges described, online incorporation is practically unfeasible for many foreign investors. They are often unable to meet the necessary technical requirements or obtain the qualified electronic signature. This means that foreign investors frequently have to resort to alternative methods to incorporate a GmbH or UG in Germany.
1. Notarial Certification of a Power of Attorney Abroad
A common practice for foreign investors is to conduct a notarial certification of a power of attorney abroad. This power of attorney allows a representative in Germany to carry out the incorporation on behalf of the foreign investors. The articles of association are signed by the representative before a German notary, and all other necessary steps are handled by the representative.
2. Costs and Bureaucratic Effort
This approach involves additional costs and bureaucratic effort. Notarial certification abroad often requires an apostille or another form of legalization to be recognized in Germany. This can be time-consuming and expensive, particularly if multiple documents and steps are involved.
Conclusion
Online incorporation of a GmbH or UG in Germany represents a significant step towards digitization and modernization of the incorporation process. The legal framework and technical prerequisites make the incorporation process more efficient and flexible. However, the technical requirements and practical feasibility present substantial hurdles for many founders, especially foreign investors.
Foreign investors face the issue of being unable to meet the necessary technical prerequisites, rendering online incorporation practically impossible. As a result, they have to rely on alternative, traditional methods such as notarial certification of a power of attorney abroad and appointing a representative in Germany.
To fully harness the benefits of online incorporation, further simplification of the technical requirements and improved integration of foreign identity documents into the identity verification processes are needed. Only then can online incorporation become a truly inclusive and efficient procedure for all founders, both national and international.
