A start-up is fundamentally different from a business founder. Of course, we can also count them among our clients, but here the scalability of the business model is not one of the most urgent tasks and the growth is usually only limited in terms of space. Here, too, we offer individual solutions after discussions with our clients. In contrast, start-ups usually come to us with ready-made contract documents from their home market, which then have to be adapted for the German market. The adapted German documents should usually not differ too much from the original French- or English-language contractual documents, so that a uniform appearance of the start-up can be guaranteed across countries.


In this respect, advising a start-up is usually also more time-consuming. In concrete terms, this can be illustrated by the example of the right of withdrawal. In order to scale a functioning business model for the German market, for example, when selling services and/or products in the B2C sector, the conditions must be created by the start-up in Germany so that consumers can exercise their statutory right of withdrawal. Here, not only legal considerations are necessary, but also best practices, which we develop together with our clients based on the legal requirements and with practical solution models.

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.

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.

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.

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.

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.