When you’re starting a company, you have to build your product & talk to your customers—but at some point—you’ll have to dive into legal stuff. In order to do so, you’ll have to either 1) get a lawyer that may confuse you & charge you for standard legal documents or 2) become a lawyer yourself! You’re a startup founder, not a lawyer. Especially if you’re starting a company in Berlin and the 3 co-founders are from Italy, Sweden & Bulgaria. Well, that’s exactly why we’re launching LegalStrasse: To empower entrepreneurs with all the legal tools they need to set up a German company on their own. We provide them with state of the art drafts of all the contracts they need – for free. ✊ In this first workshop, our lawyer Daniel Streiff explains the contracts and legal & contract procedures about registering your company in Germany so you become lawesome & avoid the common pitfalls. We talk about Articles of Association,Shareholder Agreement, Managing Director Contract.

1. Launching
by
Streiff Law
&
TheFamily

2. Part I - Founding
your GmbH / UG
Part II - Growing
Part III - Funding
daniel@streifflaw.de

3. Part I - Founding
your GmbH / UG
1. Why LegalStrasse
2. How it works
3. GmbH/UG: what, why, when & how
4. Founding documents
daniel@streifflaw.de

4. 9 out of 10
Startups fail
Many for lack of a legal infrastructure
and legal knowledge
daniel@streifflaw.de

5. daniel@streifflaw.de
a new hope
Empowering founders
through legal
infrastructure & knowledge

6. daniel@streifflaw.de
Why
Legalstrasse
#1: Avoid the pitfalls

7. daniel@streifflaw.de
Why
Legalstrasse
#2: More bootstrapping

8. daniel@streifflaw.de
Why
Legalstrasse
#3: Bring balance to the
force

9. daniel@streifflaw.de
Why
Legalstrasse
#4: It’s free!

10. Part I - Founding
your GmbH / UG
1. Why LegalStrasse
2. How it works
3. GmbH/UG: what, why, when & how
4. Founding documents
daniel@streifflaw.de

11. 1. Go to legalstrasse.com
2. Select & download docs
3. Edit marked passages with
help of comments
4. For founding start with
AoA, SHA and MD contract
daniel@streifflaw.de
2. How it works

12. Part I - Founding
your GmbH / UG
1. Why LegalStrasse
2. How it works
3. GmbH/UG: what, why, when & how
4. Founding documents
daniel@streifflaw.de

13. ● Founders join to work together
GmbH = Gesellschaft mit beschränkter Haftung
UG = Unternehmergesellschaft (haftungsbeschränkt)
Shareholders
GmbH/UG
● Legal entity independent of its
shareholders
● Limited liability
What is a GmbH/UG?
Managing Directors

14. Why should I found a GmbH
or a UG?
● Limited liability
● Legal entity independent of its
members
● Publicly accepted
daniel@streifflaw.de

15. So how is a GmbH different
from a UG?
1. name
2. share capital
● GmbH ≥ 25,000 € in assets
● UG ≥ 1 € in cash
(have at least 1.000 € to
cover founding costs)
Shareholders
GmbH/UG
daniel@streifflaw.de

16. So what should I choose?
daniel@streifflaw.de
➔ You can upgrade at any time
(need to retain 25% of profits anyways)
➔ UG is also ideal for founder holdings
➔ If you want to invest < 25k, go for UG

17. When should I found?
1. After developing idea and finding co-founders, but
2. Before creating any IP (software, domain, logo,
prototypes)
daniel@streifflaw.de

18. Why found so early?
Any business activity (creating IP,
income, advertising) automatically
founds a GbR partnership, even
without a contract!
daniel@streifflaw.de
Risks
● Expensive transfer
GbR to GmbH
● Taxes
● IP blackmailing
● Lower valuation

19. 5 steps to found a GmbH or UG
GbR Pre-GmbH GmbH
Notary
(“marriage”)
● Notarize AoA & SHA (€)
● Sign MD contracts
Commercial Register
(“birth”)
● Only pay register & notary (€)
● Entry into public register
Bank
(“intercourse”)
● Open bank account
● Put firm on mailbox
● pay share capital (€)
● Notify notary
Administration
(“applications”)
● Trade registration (€)
● Finanzamt (VAT)
● Comm. chamber (€)
● DRV: MD status check
Idea & team
(“dating”)
● Business plan
● Find co-founders
● Prepare founding
contracts
daniel@streifflaw.de

20. Part I - Founding
your GmbH / UG
1. Why LegalStrasse
2. How it works
3. GmbH/UG: what, why, when & how
4. Founding documents
daniel@streifflaw.de

21. The founding documents
daniel@streifflaw.de

22. 4.1 Articles of Association (AoA)
The company’s constitution.
● essential data (name, business
object, share capital etc.)
● Organization: shareholders’
meeting (voting rights etc), MDs
Solo founders (e.g. “Founder’s Vehikel”) can
save notary fees just using a standard form
daniel@streifflaw.de
Shareholders
GmbH/UG (AoA)
MDs

23. AoA issues
Object
Regulatory violations
may shut down your
business (e.g. banking,
agents)
http://bit.ly/2qoruFd
Shares
Total amount and
distribution
Name
Check for identical and
similar trademarks
wipo.int
daniel@streifflaw.de

24. 4.2 The Shareholders’
Agreement (SHA)
Secret pact between founders
Get it notarized (tax authorities notified)
Shareholders (SHA)
GmbH/UG
daniel@streifflaw.de
Critical clauses in our template
Pre-emption rights, vesting, drag along,
tag along, non-competition clauses etc.

25. SHA: Vesting
= Founders have to return
shares if they stop working for
the company within the vesting
period (3-5 years).
Stop working = quit, refuse to work or
company firing you
When stopping in the cliff period (e.g. 1
year), you keep 0 shares at all
daniel@streifflaw.de

26. 4.3 The Managing Director
service contract
MDs (Geschäftsführer)
● manage the company &
● represent it.
A GmbH/UG needs at least 1
human as a MD
The MD contract covers the
internal rel.ship w/ company.
Shareholders
GmbH/UG
MDs (MD contracts)
daniel@streifflaw.de
orders

27. Managing Director issues
Public obligations
= external liability of
MD (damages, jail time)
● Taxes, bankruptcy
● Share capital
● Accounting
Internal Liability
MD is liable towards
the company for any
mistake (our template
limits this liability)
Social Status
Is MD (self-)employed?
Wage tax, insurances?
➔ DRV Status check
within 1 month
after notarization
http://bit.ly/2pwsIdA
daniel@streifflaw.de

28. Ready to found!
daniel@streifflaw.de

29. daniel@streifflaw.de
Next legal workshop:
Part II - Growing
your GmbH / UG
1. Protecting IP
2. Employment contracts
3. Freelancer contracts
4. Employee participation (ESOP)

30. Thanks to Gregor Cresnar from Flaticon.com for designing all icons!
Thanks for
listening!
Comments &
questions to
daniel@streifflaw.de

31. The founder’s holding -
Russian doll structure
Founder owns 100% of a UG that is
a shareholder in the operating
company
daniel@streifflaw.de
GmbH Shareholders:
2 humans, 1 UG
Operating GmbH
UG shareholder:
1 human
Why? The holding can reinvest
profits with 5% tax only and deduct
business expenses!