From one-man business to corporation – the time is right!
If you are thinking of turning your one-man business into a corporation, this is the right time! If the change in legal form is made until the end of June, your sales are transferred to the new company.
Qualified establishment
A change in legal form is slightly more complicated than founding a new company from scratch. However, good preparation will make your life a lot easier. When going from one-man business to corporation, the newly founded AG or GmbH takes over certain components of the old business. In most cases, this leads to the dissolution of the old legal form and the entry in the commercial register is removed. This transformation is called a qualified establishment and has slightly more stringent requirements than simple company foundation. As a result, the step from one-man business to corporation may result in higher costs.
The right time to change
The best time to change your one-man business into a corporation is until the end of June. This is mainly because the change is made retroactively as of the 1st of January. All your sales are transferred to your newly founded AG or GmbH. As a result, you don’t need to compile the financial statements of your old one-man business, thus saving you time and effort. However, this only works if the change in legal form is made before the 1st of July.
For more information on how to change the legal form of your company, please visit our homepage.
