- Are shelf companies legally permissible?
Shelf companies are legally permissible provided they are openly founded, i.e. they are identifiable as a shelf company. This is the case if the object of the company is stated as “The management of own assets.” All VRB shelf companies are shelf companies that have been openly founded.
This differs from the hidden shelf founding in which the object of the company stated in the articles of association is notional, which in reality is not to be seriously pursued (e.g. to obtain a tax number by such means). Hidden shelf foundations are inadmissible, and lead to the invalidity of the foundation.
- What is the right legal form for me?
Many factors must be taken into account when choosing the right legal form. For example, different taxation is relevant when deciding between a joint-stock company (GmbH, entrepreneurial company or company limited by shares) or a partnership (limited partnership with a GmbH as general partner or individual limited partnership). If you do not yet know which legal form best suits your plans, you should seek advice in advance from your tax consultant or lawyer.
- What is to be understood by “economic re-establishment”?
The acquisition of a shelf company constitutes a so-called economic re-establishment, because the previously inactive company is now to perform business activities for the first time. The new managing director, therefore, undertakes to disclose this to the commercial register and, as in the case of a legal new foundation, assure that the shareholders have provided their capital contributions in full and that the new managing director can freely dispose of them.
- Why do you not offer entrepreneurial companies or GmbHs with a sample protocol?
The sample protocol is made up of articles of association pre-formulated by the legislator, which also contains the appointment of the managing director and the list of shareholders. It is aimed at simplifying the foundation of an entrepreneurial company or GmbH, and reducing notary fees.
However, savings can only be made for an entrepreneurial company with a low share capital, and are rather low at about EUR 200 to EUR 300. By contrast, the sample protocol severely restricts the founders. For example, only a maximum of three partners are permitted, and only one managing director can be appointed. In addition, the rights and duties of the partners among themselves remain completely unregulated. Use of the sample protocol is not recommended, above all in view of a potential subsequent change in the corporate and representation relationships.
To rule out difficulties during or following acquisition from the outset, we do not even offer entrepreneurial companies or GmbHs with a sample protocol.
- Do VRB shelf companies have a tax number and VAT ID?
No. As a matter of principle, the tax offices do not issue tax numbers to shelf companies because the local jurisdiction usually changes with the purchase. A regular tax number is only issued following the purchase.
Insofar as older shelf companies were, in part, given a tax number in individual cases, this is neither significant in terms of VAT nor wage tax, and cannot be used in business transactions (recognisable by the “138” in the middle). It is absolutely necessary, therefore, that you ask for detailed information in the case of corresponding offers for “GmbHs with tax numbers” on the internet. In many cases, this is, in fact, only a provisional tax number.
- How can I obtain a tax number and where applicable a VAT ID?
As soon as the new company name of the shelf company and the domestic business address have been entered in the commercial register following the purchase, the tax office sends the “Questionnaire for determining local jurisdiction” to the company. Based on your information in this questionnaire, the tax office then determines the tax office that will be responsible for the company in the future, and forwards the file there. The new tax office subsequently informs the company of a full tax number, and forwards the “Questionnaire for tax registration.” In the questionnaire you can then also apply for a VAT ID, if required.
- Do the shelf companies have balance sheets and year-end financial statements?
When a shelf company is founded, we prepare an opening balance sheet for it, which you receive with the company documents. Insofar as a shelf company is in our portfolio at the turn of the year, we also prepare annual accounts and file them in the company register.
- Does VRB also file tax returns for shelf companies?
VRB does not file tax returns because shelf companies are commercially inactive. The tax office is aware of this. Therefore, neither a tax number is issued for shelf companies nor are they requested to submit tax returns.
A tax return can only be submitted following the sale and issue of a tax number. This also applies to the so-called zero return for shelf companies provided they have already prepared year-end financial statements. Issuing the tax number, in turn, depends on entry of changes to the company name and the domestic business address in the commercial register.
- What costs will I incur in addition to the purchase price?
When purchasing a shelf company, notary and court costs are to be borne by the purchaser in addition to the purchase price for the shelf company itself. These costs vary considerably depending on the form of company and requested changes. Your notary will inform you of the exact costs. More information is also available here. When acquiring a GmbH, you should expect costs of about EUR 700 for the notary and about EUR 300 for the commercial register. These costs can be charged to the company as start-up costs.
- Can I also acquire the shelf company without the share capital, and only pay your extra cost?
Unfortunately not. Our shelf companies are only sold with fully paid-up share capital. This is not possible otherwise for legal reasons, and is handled in this way by all reputable providers. Furthermore, when acquiring the company, the new managing director must assure that the capital remains at the company’s free disposal. This is only possible with fully paid-up capital.
- What happens if I do not need a shelf company after all?
As long as you have not yet purchased the company, we will cancel the reservation. You incur no costs because that is exactly what we are here for.
If it only becomes apparent following authorisation of the purchase and transfer agreement that you have no use for the company, we will buy back our companies on a case-by-case basis to subsequently liquidate them. We would be happy to prepare an offer for you.
- What is a KYC audit?
In the case of a KYC (Know Your Customer) audit, a credit institution reviews new customers’ personal data and business data. According to the German Money Laundering Act, credit institutions undertake to perform this audit not only when opening, but also when transferring an account.
The type and purpose of the business relationship must also be recorded, and the origin of funds and assets must generally be clarified. In the case of natural persons, an investigation must be conducted as to whether or not a so-called politically exposed person (PEP) is involved. In the case of legal entities, the ownership structure and company structure, but also the activity, sector, number of employees and the most important financial key figures are recorded. All audits and the persons involved in the audit must be documented.
The KYC audit, therefore, often takes a considerable amount of time. The duration depends on the individual case. For example, a more in-depth audit is to be expected for a systemically important large bank than for smaller institutions. On the other hand, the client’s structure plays a role. If only natural persons are involved, an audit is usually conducted faster. As soon as legal entities are involved, the beneficial owner must be clarified, as is also the case, for example, in the Transparency Register. This can lead to delays, in particular if foreign companies are involved.
The same auditing obligations also apply to the purchase of a shelf company. Since the beneficial owners change in this case, the banks are required to perform a full KYC audit when the account is transferred.
- What is the Transparency Register?
The Transparency Register was introduced in June 2017 to implement the Fourth EU Money Laundering Directive. It is maintained in electronic form, and is intended to make a significant contribution to combating money laundering and the financing of terrorism. The information entered in the Transparency Register provides information about the beneficial owners behind associations and legal structures. Since 01.08.2021, all legal entities under private law and registered partnerships must identify their beneficial owners and aktively report them to the Transparency Register for registration.
For each of our shelf companies, we have reported the beneficial owners to the Transparency Register. Since the beneficial owners change with the acquisition of a shelf company, these new beneficial owners must also be reported to the Transparency Register. This should be done as soon as possible to avoid difficulties when opening or transferring accounts.