START-UP
icone AdFontes Start-Up
We offer special start-up counselling in order to better respond to the specific needs of start-up companies.
Start-up counselling combines a variety of legal topics, from the formation of a company to the drafting and adaptation of contractual documents, such as general terms and conditions, tax advice and increasingly important; data protection counselling (e.g. drafting data protection statements, order processing agreements), in order to avoid lawsuits, e.g. due to data protection violations.

Ad Fontes offers
special start-up
counselling

The mandates have to be processed within a short time because the start-ups have clear time limits from their investors for their business development in Germany.

Ad Fontes, as your law firm, also adapts to these requirements. It is particularly important to establish a timeline right from the start, which outlines the exact procedures for legal advice and which is also tailored to the respective needs of each individual start-up. The multitude of questions that one is confronted with must be structured so that they can be brought to a solution in the right order.

One of the first steps is therefore to check whether the business model in question requires special approval so that there are no surprises later when it comes to implementing the business plan.

Ad Fontes offers
special start-up counselling

The mandates have to be processed within a short time because the start-ups have clear time limits from their investors for their business development in Germany.

Ad Fontes, as your law firm, also adapts to these requirements. It is particularly important to establish a timeline right from the start, which outlines the exact procedures for legal advice and which is also tailored to the respective needs of each individual start-up. The multitude of questions that one is confronted with must be structured so that they can be brought to a solution in the right order.

One of the first steps is therefore to check whether the business model in question requires special approval so that there are no surprises later when it comes to implementing the business plan.

AD FONTES EXPERTISE
An advice to start-ups french picto AdFontes

Consulting
for French
start-ups

who enter the German
market and establish their
subsidiaries here

icones_AF_Expertise_Verbatim_StartUp_Blanc_2-min

Our capacity
to explain
and to solve

complex situations
in their mother tongue,
French

icones_AF_Expertise_Verbatim_StartUp_Blanc_3-min

Legal
expertise

in English for international
and multi-market start-ups wishing
to expand into the German market

Why are start-ups so special?

A key characteristic of start-ups is that the business models are scalable, and thus new growth can be generated even across national borders by penetrating new markets. Of course, this also benefits the parent company, which has already reached a certain size in its home market, but is still a start-up by definition, because by moving into a new country, the already existing product is adapted and further developed. In this way, the product may also acquire new features that are first tested on the German market and later adopted for other markets.


Start-ups, most of which already have several rounds of financing behind them and can look back on a functioning business model in their home market, come to Ad Fontes because of our international, cross-market expertise. We are always happy to assist new clients with their goto- market in Germany and to make their business model legally fit for the German market.

How does Ad Fontes structure its start-up counselling mandates?

We try to find individual, tailor-made solutions for every mandate, because every start-up comes to us with their very individual business model. One of the first questions in our discussions therefore usually revolves around the right choice of corporate form and company name for the German subsidiary. As a result, we often set up a subsidiary, such as a GmbH (limited liability company). However, founding a new company is not necessarily always the best solution.

For start-ups in the field of payment services, for example, there are certain licensing requirements that are granted in Europe solely by the competent home supervisory authority. In such a case, it may therefore be more advantageous to set up a branch office in Germany.

In order to avoid a delay in the go-to-market for our clients, such strategic considerations are also part of our counselling.

What is the procedure of setting up a subsidiary for a start-up?

After the choice of the subsidiary company form and the subsidiary company name has been made, the founding documents are drawn up by Ad Fontes and notarised by a notary. We offer our clients that we represent them at the notary’s office, so that the directors who live abroad do not have to travel from their home country. We work with powers of attorney and a selected network of notaries who know us well and with whom we cooperate in a trusting manner.

This way, we can successfully carry out mandates where time is of the essence. For example, shortly before the turn of the year we took on a mandate for a capital increase that had to be completed before December 31. Despite the fact that the deadlines of the Berlin registry court had already expired, we were able to work together with the notary to achieve a precision landing and complete the registration of the capital increase as planned by the client.

What is regulated in the memorandum of association?

The company is established by the memorandum of association. The memorandum of association determines the legal form and the object of the company. It also regulates essential rights and duties between the partners. It is therefore an important element, particularly in conflict situations. Certain contents are prescribed by law and must be set out in the memorandum of association. In addition, however, there is also scope for the partners to make further regulations, e.g. the essential legal relationships of the partners, the benefits, contributions and the liability of the partners.

Ad Fontes actively
accompanies you in the process of notarization
for your new German subsidiary

Notarial certification is compulsory for corporations, such as a GmbH or AG (limited and unlimited liability companies). This is not necessary for partnerships. However, partnerships must be entered in the commercial register in publicly certified form.

Ad Fontes actively accompanies you in this process:
Preparation and examination of the documents
Arrangement of the notary appointment
Accompaniment at the appointment

The time availability of the notaries must also be taken into consideration if the notarisation is to be carried out quickly before the summer holidays in June/July and at the end of the year. Ad Fontes discusses such particularities with our clients and adjusts the timeline of the start-up so that all the necessary legal and notarial requirements can be met at the appropriate time.

Ad Fontes actively accompanies you in the process of notarization for your new German subsidiary

Notarial certification is compulsory for corporations, such as a GmbH or AG (limited and unlimited liability companies). This is not necessary for partnerships. However,
partnerships must be entered in the commercial register in publicly certified form.

Ad Fontes actively accompanies you in this process:
Preparation and examination of the documents
Arrangement of the notary appointment
Accompaniment at the appointment

The time availability of the notaries must also be taken into consideration if the notarisation is to be carried out quickly before the summer holidays in June/July and at the end of the year. Ad Fontes discusses such particularities with our clients and adjusts the timeline of the start-up so that all the necessary legal and notarial requirements can be met at the appropriate time.

Which important documents are necessary for the employees when founding a start-up?

In the case of a newly founded start-up, in addition to the memorandum of association, the employment or service contracts for the employees must also be prepared. Further powers of attorney and procuration must also be expressly granted and, if necessary, entered in the commercial register. Therefore, following the clarification of all questions of company law, we carry out the corresponding contractual adjustments and drafting. We offer our clients the opportunity to cooperate with our network of friends in the area of payroll accounting and taxes and can draw on experienced partners in this area.

Is tax counselling necessary?

When founding and running the start-up, various financial and tax law issues arise that often require specialist counselling (tax registration, balance sheet, etc.). In addition, there are the intra-group calculations of services between parent company and subsidiary, which raises complex cross-border tax (and economic) issues and requires contractual agreements between parent company and subsidiary. Here, the legal provisions in Germany have only recently been reformed.

It should also be noted that such contractual arrangements also affect, for example, the French tax administration, since the tax result of the French parent company is of course also affected by the determination of the transfer prices. In order for these arrangements to be acceptable to the German tax authorities, the remuneration for intra-group services must be determined in advance according to written contracts. They must also comply with the arm’s length principle. The arm’s length principle must be proven to the German tax authorities. Since cross-border services are involved, the requirements for proof are higher than on a purely national level. In addition, formal documentation of the transfer prices is also required. This is already necessary with a turnover of EUR 600,000.00 in the current business year.

What about payroll accounting and labour law?

Payroll accounting holds many hurdles for startups. The fact alone that there are more than 100 health insurance companies in Germany causes a not to be underestimated administrative burden. New employees who have moved from another company to the start-up often express wishes regarding deferred compensation and the assumption of supplementary insurances from which they had already benefited in their previous contract. The intricacies of German social and labour law pose great challenges for the HR department of the parent company, which is usually still foreign. We work out the specific German labour and social law requirements together with you and offer comprehensive advice in the process. The software solutions that start-ups usually like to use to carry out payroll accounting themselves offer only limited answers. Good counselling is usually the better and safer way. Here, problems can be solved quickly through short channels such as via telephone, and not only when the relevant authorities inspect the company or when omissions arise when the employment relationship is terminated. In these cases, solutions can only be found with great difficulty and capital investment. Good advice from Ad Fontes is also the better way here, at least until the subsidiary has also been able to set up its own HR department.

German labour law also holds many surprises. The fact alone that a termination in Germany must be in writing to be effective should not be underestimated in practical terms. An e-mail does not fulfil this written form requirement and there will be unpleasant surprises in the labour court proceedings at the latest if the procedure is not exactly in accordance with the requirements of German labour law. In order to prevent the immediate rejection of a dismissal, we develop solutions for our clients that are in line with their interests, e.g. by appointing an authorised signatory in the German subsidiary (where possible). This is usually the simpler option compared to a power of attorney, as the latter must always be presented in the original in the event of termination.

Ad Fontes also provides you with tax law
advice and we develop for our clients
solutions tailored to their interests

Ad Fontes also provides you with tax law advice and we develop for our clients solutions tailored to their interests

Start-up advice is a broad field that requires
a wide range of legal skills.

Ad Fontes will be happy to assist your start-up throughout the entire incorporation process
and provide new clients with our expertise.
Ad Fontes looks forward to hearing from you.

Start-up advice is a broad field
that requires a wide range
of legal skills.

Ad Fontes will be happy to assist your start-up throughout the entire incorporation process
and provide new clients with our expertise.
Ad Fontes looks forward to hearing from you.