To start a business in Germany, you might need to register it in the Commercial Register. This article explains what the Commercial Register is, who needs to register, and what events you need to report. We also explain how to register, the costs of registration, and how to cancel a registration. And we provide tips on how to protect yourself from possible fraud in connection with commercial registrations.

What’s in this article?

• What is the Commercial Register?
  
• When is it mandatory to enter the Commercial Register?
  
• When is it not mandatory to enter the Commercial Register?
  
• What is HRA and HRB?
  
• How does an entry in the Commercial Register work?
  
• How much does it cost to enter the Commercial Register?
  
• What events do businesses have to report to the Commercial Register?
  
• How can businesses protect themselves from attempted fraud when registering in the Commercial Register?
  
• When is it necessary to delete an entry in the Commercial Register?
  

What is the Commercial Register?

The Commercial Register or Company Register is a public directory with notarised information about the legal and economic circumstances of businesses. It is run by the local courts and primarily serves to create transparency and trust in business life.

Businesses with an entry in the Commercial Register have higher credibility than businesses without an entry. Potential partners, investors, banks, creditors, or authorities often insist on an extract from the Commercial Register before entering into new business relationships. The Commercial Register is kept exclusively in electronic form. Anyone, including private individuals, can search for businesses and view their stored information for free.

For businesses, registration offers another advantage: Your business name receives additional protection against similar names in the region. A name may be used in business transactions only by businesses that are registered in the Commercial Register.

When is it mandatory to enter the Commercial Register?

All people and businesses that are legally defined in Germany as merchants are required to make an entry in the Commercial Register. Some legal formations are automatically classified as merchants. These include:

• Limited liability company (GmbH)
  
• Entrepreneurial company with limited liability (UG)
  
• General partnership (OHG)
  
• Limited partnership (KG)
  
• Public company (AG)
  

Registration in the Commercial Register is also mandatory for registered merchants (i.e. sole proprietors operating a commercial business). The condition is their activity requires a commercial activity. If this is the case, they are a “de facto merchant”. If the business doesn’t require a commercial operation, they are called an “optionally registrable merchant”. Though de facto merchants are required to register in the trade register, optionally registrable merchants can choose whether or not to register.

In individual cases, however, it can be difficult to determine whether a commercial activity exists because there are no clear legal requirements. Assessment criteria include turnover, business assets, number of employees and locations, and the type and variety of services provided or the quantity of products.

When is it not mandatory to enter the Commercial Register?

Entry in the Commercial Register is not mandatory for all legal formations. For example, small businesses that do not run a commercial business do not have to register but can do so voluntarily. In this case, they automatically become registered merchants with all the associated rights and obligations – such as adding the abbreviation “e.K.” to the business name. When a GbR is entered into the Commercial Register, it automatically becomes an OHG.

Freelance professionals, by contrast, are usually not entered into the Commercial Register. This also applies if you set up a freelance GbR or partnership with other people. These legal formations are entered in the partnership register for freelance professions.

The following table provides an overview of which legal entities require registration in the Commercial Register and which do not.

Obligation for entry in the Commercial Register based on legal formation

What is HRA and HRB?

Anyone who wants to make an entry in the Commercial Register in Germany will inevitably come across the abbreviations “HRA” and “HRB”. They represent two divisions of the Commercial Register, which differ regarding the types of businesses registered.

Registered traders, partnerships such as KG and OHG, and legal commercial associations are entered in the “Commercial Register Division A” (HRA). The “Commercial Register Division B” (HRB), on the other hand, contains all information relating to corporations – including GmbH, UG, or AG. The Commercial Register numbers of the businesses begin with the abbreviation of the relevant division (i.e. HRA or HRB).

How does an entry in the Commercial Register work?

An entry in the Commercial Register in Germany requires a few steps:

• Selection of legal formation and preparation: The first step is to determine what legal formation your business will have. Also check whether the chosen business name is permissible, and create the founding documents required for the legal formation – for example, articles of association.
  
• Consultation with a notary: You cannot place an entry in the Commercial Register on your own. You need a notary to prepare and submit your registration documents. Therefore, find a notary first, and arrange a consultation appointment.
  
• Transfer of required information: The notary needs some mandatory information to initiate the entry in the Commercial Register. This information can differ depending on the type of legal formation of the business. In any case, the following information is required, among other things, and you should provide it to the notary’s office:
  
  • Legal formation of the business and industry
    
  • Business name
    
  • Name and address of the business’s headquarters and all branches
    
  • Names of the owners and the personally liable partners
    
  • Names of the authorised representatives
    
  • Amount of basic, share, or limited partnership capital
    
• Notarial certification: All documents and formalities will be checked by your notary. If everything is complete and correct, the founders or managing directors of the business provide a signature, which is notarised.
  
• Deposit of share capital: If the legal formation you have chosen requires share capital, you must deposit this into your business account. Then send the deposit slip to your notary.
  
• Submission of documents: The notary transmits all information and documents electronically to the responsible local court.
  
• Review by the local court: The district court reviews the submitted documents for completeness and legal conformity. Depending on the legal formation and local court, this process can take several days to a few weeks, at most.
  
• Payment of the registration fees: The local court issues a fee notice that includes the costs for registration and, if necessary, publication. You need to pay the registration fees to finalise the entry into the Commercial Register.
  
• Registration and official notice: The entry of your business into the Commercial Register is the final step. The entry is published in the electronic Federal Gazette.
  Receipt of the Commercial Register extract: After registration, you will receive an extract from the Commercial Register that documents the current status of your business in the register. If important information changes, you must report this to the responsible local court.
  

Commercial Register entry in Germany: Step by step

How much does it cost to enter the Commercial Register?

The costs of entry in the Commercial Register in Germany vary depending on several factors, including the selected legal formation, the amount of share capital, and the number of partners. A good place to start for an approximate cost estimate is the Chamber of Commerce and Industry (DIHK). In many cases, you will find reliable fee overviews here, which ideally include the costs for the Commercial Register entry and the costs for the notary.

The IHK Koblenz, for example, calculates the total costs for the Commercial Register entry of a general partnership with two partners at €240. For registered traders, the initial registration costs €170, and for a KG (limited partnership), the initial registration costs between €208 and €253.60, depending on the deposit.

Further details on the official fees are also available in the Commercial Register Fees Ordinance (HRegGebV).

What events do businesses have to report to the Commercial Register?

Businesses must immediately report certain events or changes that affect the information entered in the Commercial Register and have it updated accordingly. The changes will not be legally effective until the Commercial Register entry has been updated. Events that must be reported include:

• Name changes
  
• Relocation of the business’s headquarters
  
• Opening, relocating, or closing branches
  
• Changes in management or changes to representation
  
• Entry or exit of partners
  
• Changes to the articles of association
  
• Changes in the business’s purpose or field of activity
  
• Increase or decrease in share capital
  
• Insolvency proceedings
  
• Dissolution and liquidation of the business
  

The majority of events require new notarial certification. Businesses that do not comply with their obligation to register or update information can be fined by the responsible local court. According to Section 14 of the German Commercial Code (HGB), that amount may not exceed €5,000.

How can businesses protect themselves from attempted fraud when registering in the Commercial Register?

Some criminals take advantage of the fact that entries and changes in the Commercial Register are published online. Based on this information, they create and send false invoices or dubious offers to businesses. Some businesses receive what appear to be invoices from the Commercial Register that are difficult to distinguish from official letters. Sometimes businesses receive offers to be included in other supposedly existing registers and databases for a fee.

It is important to look closely to identify fake documents and dubious requests. The names of the senders can be a clue. These are usually based on the phrase “Commercial Register” and contain terms such as “trade”, “commercial” and “register”. The result is misleading business names such as “Bundesverlag Anzeiger Handelsregister” or “Deutscher Gewerberegisterverlag”.

You should also check who the money will be transferred to. Private recipients are usually listed on false invoices. However, payments to the Commercial Register are normally processed via the judicial treasury of the responsible federal state. If the international bank account number (IBAN) does not begin with “DE” but indicates a foreign account, it can be assumed to be attempted fraud.

You should also pay close attention to payment terms and late fees. Official invoices usually have a payment deadline of 14 days. Payment deadlines on fake invoices are often only a few business days. They may also threaten high fees if the money is not sent quickly.

If you are unsure whether you have received a genuine letter or a fake, contact your notary.

When is it necessary to delete an entry in the Commercial Register?

An entry in the Commercial Register can be deleted at any time. To do so, businesses simply need to have a written request for deletion notarised and submitted to the local court. Deletion of the Commercial Register entry officially terminates the business and it no longer exists in law.

Deletion from the Commercial Register is mandatory in some cases, including:

• Dissolution of the business
  
• Merger or transfer to another business
  
• Conversion of a commercial business into a freelance business
  
• Downgrading a commercial business to a non-commercial business