Comment by earthnail | Hacker News Reader

Comment by earthnail | Hacker News Reader

I have a GmbH, and I'm German. The process is more complicated than in other countries because of the notary. The notary doesn't really add value in this process, he/she just costs a lot of money.

The German Standards Setting Institute, a private organization which provides lots of standard template documents for startups, actually make it a focus to minimize the notary costs in many of their docs (and ironically, they have notaries helping them because some notaries also think it's ridiculous).

It is much simpler to set up a limited company in the UK, for comparison (which I've also done). And everything the author describes, about the IHK for example, and the Bundesanzeiger Verlag, appears completely stupid to me, too. What value exactly does the IHK provide me? I asked my tax consultant that, too, and he gave me a vague answer along the lines of "they do stuff for you and it's good", and I still have no clue what the IHK does for me.

The official letter for the Bundesanzeiger Verlag states "we know that you probably received a lot of fraudulent mail asking you to wire money to other bank accounts. Do not trust them, only trust this letter and send money to the following bank account." Really? Your word on your letter vs their word on theirs? WTF?!?

Yes, it is ridiculous.

The notary thing is insane. It's not a completely redundant profession, but it's not that far off. I suppose it's nice to have if two parties, non of whom the government trusts, sign a contract with each other and you need a trusted witness. But for when you submit some documents to the government? Absolute bullshit. But the German government really does not like to make itself unpopular by making professions redundant, so notaries are going to stay around for a long time.

It's all a part of the general conservatism that comes with having a high median age. Everything here moves slowly. And there are benefits to that, for people who for various reasons don't like change (and there are a lot of those).

> But the German government really does not like to make itself unpopular by making professions redundant

Indeed, much more popular to be hit with a wall as soon as you try to start a business.

I set up a GmbH, it didn't seem like such a big deal.

Regarding the fraudulent invoices, I was warned by at least two people (out of notary, tax advisor, and a friend of a friend who had done it before and outlined the process for me) about it, so no problem.

My biggest problem was a useless tax advisor / accountant who missed important tax filing deadlines and such. The Finanzamt was upset and threatened deletion of (some aspect of the company, I forgot). I got another tax advisor. That solved the problem.

The IHK represents the interest of local companies to the local government and also offers some (IIRC) courses, guides, meetups and such. Membership costs 70€ a year, I don't care about that.

I think maybe you didn’t see why it’s a big deal because you’ve never done it somewhere where it’s a lot faster/smoother? I run a UG here, it took about 3 months to set up because as a first time founder I messed up some of the weird arbitrary steps. If I’d have gotten it right it would have probably only taken 1-2 months (if I ever do it again it will probably take this long). It also cost a couple thousand € overall & still costs a few 100s every quarter for the Steuerberater et al.

It’s not enough friction for me to not incorporate in Germany, but I’d prefer if they’d reduce it nevertheless. Because so many countries (like the UK, Netherlands or Singapore) don’t take this much time/friction, I suspect it’s possible to optimize.

I disagree the notary doesn't add value, he takes legal responsibility for the truthiness of what you're signing and does all the checks to verify you comply.

Is that value worth over other systems? I cannot say.

But in other systems you will likely have to hire a lawyer, with the huge difference that if the lawyer makes a mistake he bears minor to no responsibilities in front of the law.

The notary doesn't check whether it's true, only that it's actually you declaring whatever you're declaring.

He takes legal responsibility so he has to verify it. He has to verify your identity, claims, documents, do checks in various registers, transcribe and transmit information to various offices, etc, depends on what you are doing.

I am not saying I love this system, but to say notaries are useless (especially in countries like germany or italy) means not understanding their service.

Perhaps there's a difference between jurisdictions? In the US a notary only stamps that you are authenticated (ie, not fraudulent) and that the document is what it claims to be.

The notary in Germany has a prescribed list of duties which goes beyond just identifying you. There is money laundering checks and ensuring filings with the government registers as well.

If the German government wants to make sure I'm not laundering money then it should be on their dime, not mine.

How do you think taxes work? Forming and operating a business is not a social service.

That's just one of the services.

Also, counter argument:

why should the collective pay the bill through taxes for privates to check they comply with the law? You realize in other countries you would still need to rely on the subpar services of a lawyer for any non-trivial issue?

What is that, socialism? /s

As I said, I am not saying that I'm a fan of notary services, but in countries like Italy and Germany where laws are different they do have a role.

People bash on this system and think it's more expensive but let's do some math.

E.g. In Italy we need notaries to buy a home but this includes a lot of services and it includes taxes, registrations, appraisals, etc. I am buying a house right now and I'm paying a whole 3300 euros to the notary (including taxes) for his services and I have literally to do not paperwork, go to any office or anything.

Now, in Texas, when buying a house you'd spending 6.75% in taxes, which would be much more than what you would pay in Italy (almost by a 10x factor) and all the costs of the paperwork is on the buyer and you get no assistance of any sort.

Are we sure other systems are much better?

What if you file wrong paperwork, do you get any legal protection? No. Well you would in Italy or Germany as the notary has legal responsibility for any documentation error or any missing verification.

It is really not as bad as people make it to be.

Again, I'm not vouching that's the best system there is, but I find it better for the consumer, cheaper and safer (also, way easier to have someone else handle all of the beaurocracy).

There absolutely is. Notaries in Germany do a lot more than in the US and must hold a law degree.

I'm in the UK and these notaries sound a lot like conveyancers.

In theory the conveyancer deals with the contract of transferring a property, they check the liabilities and conditions attached to a plot of land, and ensure the process goes smoothly.

In reality each side is paying £3000-5000 to have a bunch of totally form letters sent back and forth between the two parties.

I keep wondering if there's a startup in conveyancing as a service. £50 and you're done, and the process is easy for all parties to track.

Arguably the most important service a notary provides is archival. Everything signed at a notary is kept there pretty much in perpetuity. If a notary retires all his documents are taken over by their successor.

It is same in India too. The amount of time that is wasted on it is absolutely massive.

There is no benefit. We have director and ID sign which is accepted in a few departments for what they ask for a notary to witness in others.

Printing something on stamp paper changes absolutely nothing.

The amount of mindless bureaucracy just to waste people's time gets me every time. If you want more money, just ask for it directly.

Also all the penalties for not doing redundant and useless paperwork. You can pay all the taxes and be compliant yet if you don't fill form saying I paid everything, they penalize you.

IHK is responsible for local advertising and recruiting and acts as a middle agency beween government and industry.

They give sometimes interesting talks and you can reach out for assistance. Not much to complain about for the price imho.

Just because you don't need it on your own doesn't mean other founders or existing companies don't need it.

With the foundation of a company you have some obligations and this one is one of those - strengthening the local market. (If you can't afford 150€ or 0,129% percent of your profit your business is not sustainable (referring to your value question)).

The classic argument, if you can’t pay XXX$ for some bullshit someone else invented and that doesn’t belong in 21st century, then you’re business is not sustainable. IHKs exist for the sole purpose of lining their fat pockets on other people’s hard work, like other professions in Germany, notary included.

> Just because you don't need it on your own doesn't mean other founders or existing companies don't need it.

Then they should be free to hire them on their own dime.

> and that doesn’t belong in 21st century

That's your opinion.

> Then they should be free to hire them on their own dime.

Cool thing of living in democracies is that people can propose and campaign for these changes. Maybe Germans like it as it is and it's their business?

Having lived in Germany for 5 years.. I think you hit the nail. Germans don’t like things to change. They like what they have as it makes business predictable and decisions easy. And if that means getting behind… so be it.

This flippant comment completely ignores the known problems with getting rid of rent-seeking behavior. Those that benefit from it will try very hard to keep it and the vast majority that are harmed, but only by a small amount, will not organize and campaign aggressively for its removal.

So it's very possible that the system is not liked by most Germans, but the dynamics are such that it stays the way it is.

> because you don't need it on your own doesn't mean other founders or existing companies don't need it

We can invert this logic on IHK itself. If it can’t sell itself in a manner than sustains it’s finances, it, itself, is not sustainable.

I hate paying taxes and fees. I understand anyone trying to evade or reduce them as much as legally possible. But the fee the IHK imposes is so little I honestly don't care about.

For 1.000.000 € profit its 1.400€. Literally some rounding errors or customer not paying thats not worth the hassle to discuss.

Two items:

1. 0.14% of profit is not a rounding error.

2. The true cost is not the 1400€. It’s the time you waste dealing with it, your availability of which does not increase with revenue.

Dealing with the IHK, like in paying one single invoice per calendar year? Not that I ak very happy with paying my IHK fees for a basically non-operating company, but the actual effort of dealing with them is like 5 minutes every 12 months.

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