Freelancer , company or simple businessman – what is the difference? You can quickly get lost in the great jungle of corporate forms . Here you will find practical information about the options, rights and obligations you have as a trader.
What is a can trader?
If you run a business that is not a commercial business according to the German Commercial Code, you can voluntarily register yourself in the commercial register. In accordance with Section 2, Paragraph 1 of the German Commercial Code (HGB) , in this case you are a so-called “ can trader ” and you will become a full trader.
Basically, according to § 1 of the German Commercial Code (Handelsgesetzbuch), everyone who runs a trade is also a businessman. So if you have a business, the entry in the commercial register is an absolute must, unless you belong to the following professional groups:
- Small business
- Forestry and agricultural operations
There are some obligations associated with registration as a businessman. As a specialist, you have to create proper bookkeeping . An annual profit of 60,000 euros (Section 241a of the German Commercial Code) or 600,000 euros in annual sales are a guideline for bookkeeping . Furthermore, the business structure, the number of employees and the type of service play a role in the decision whether you are a businessman or not.
Among the merchant types, you should also know the following definitions with regard to merchant characteristics:
- The mold merchant . This is a company that is classified as a form merchant due to its legal form. You can find the corresponding regulations in this regard in § 6 HGB .
- The fictional merchant . This is a group or person who is illegally entered in the commercial register.
- The bogus merchant . This is someone who does not have merchant status, but who knowingly wants to give the appearance of a merchant.
What is the difference between Kannkaufmann and Istkaufmann?
As already mentioned, the non-professional can choose whether or not to be entered in the commercial register. Self-employed with small businesses , as well as forest and agricultural businesses can in principle opt for or against, as long as they do not have an annual turnover of 600,000 euros.
The actual merchant is obliged to register as a merchant. Due to the nature of his trade, there is no doubt from the outset that he carries out commercial activities, which is why he is obliged to keep proper bookkeeping even before the entry is made.
The following graphic shows the differences between an actual, optional and form salesperson.
How do you have to differentiate between a professional trader?
The entry in the commercial register is quick and easy within a few days. Only the name of the company and the legal form need to be entered together with the company’s purpose. In the case of companies that are considered to be merchants, the share capital must also be indicated. You have to submit a notarized application to the registry court and of course pay the fees.
Tip: An experienced tax advisor should help you when filling out the application, as subsequent repairs are costly and time-consuming.
Before submitting an application, you should also know the guidelines according to which you can be registered as an optional merchant.
When are you a can-do merchant according to § 2 HGB?
As a merchant according to HGB Paragraph 2, you count if you are actually a small business owner who can voluntarily be entered in the commercial register. The prerequisite is that you run a normal business enterprise, which, however, is not considered to be an actual businessman in terms of the scope and type of activity according to Section 1 (2) . You can initiate the deletion of the company at any time by filling out the application.
When are you a can-do merchant according to § 3 HGB?
In § 3 HGB all farmers and foresters are described that can be registered as an optional merchant. Once entered, the company can only be deleted in accordance with the “general regulations” (Section 3 (2) of the German Commercial Code). If you do the forestry and agricultural activities only as a side business to operate, the in § 3 HGB rules described 2 also apply to this by-sector. 1 and Para..
What rights and obligations do you have as a salesman?
If you are considering voluntarily registering as a so-called “ can trader ”, you should know your rights and obligations. In particular, the requirement for proper bookkeeping is a major shortcoming for many. It not only includes an annual profit and loss account , but above all an extensive inventory and both an opening and a closing balance sheet . In addition , if your company exceeds a certain size , the annual financial statements must be published in the Federal Gazette. A lot of effort and a high cost factor, because for all of this you need a good tax advisor / accountant.
You also have to run a company with your own name. You can use your own name or choose a fantasy name for this. It is important that the name of your company does not match another company name or that it can be easily confused. In addition, the name must contain the legal form (UG, GmbH, etc.).
In all letters, emails, websites, etc. that you send or publish, you must state the correct name of your company, including the location of the company headquarters, the commercial register number and the competent registry court. E-mails, faxes and telephone numbers must also be given. You have the choice whether you want to write this information in the letterhead or in the footer.