Summary of trade deregistration in Germany: Everything necessary at a glance
Section 14 of the German Trade Regulation Act states that you must immediately report changes to the trade. It also applies to the deregistration of a business. You must follow it up immediately. More and more German municipalities now offer the option of deregistering a trade online. In many cities, business deregistration is free of charge—otherwise, the fees for this administrative act range between 20 and 25 euros.
Trade deregistration in Germany must be carried out if the business is permanently discontinued or the registered office is moved to another city/municipality. Trade deregistration is also required for the departure of partners in partnerships. If you are not entirely sure about future projects, you can consider an alternative to trade deregistration with a declaration of dormancy. This option has the advantage that the necessary licenses do not have to be obtained again if business operations are resumed.
Deregistering a trade – this is how you proceed
In 2018, the German government carried out the administrative act of ‘deregistering a trade’ more than 630,000 times in Germany. This figure proves that it is a frequent administrative act that can become necessary for various reasons. This article will discuss the most important causes and general conditions in this article and an alternative.
In Germany, the trade exercise is associated with certain obligations regulated in the Trade Regulation Act. According to § 14 GewO (Trade, Commerce, and Industry Regulation Act), you must report any changes concerning the trade to the competent authority. On the one hand, this concerns changes in the field of activity or the address, which you must report with your trade re-registration. And On the other hand, the case that the trader no longer exercises the trade. The reasons for this do not matter. Even those who move their Business to the jurisdiction of another municipality or city administration must first deregister their company to re-register it at the new place of activity. Even if the name may make it seem so, the administrative act of deregistering a trade is not always synonymous with giving up a business activity! Remember that the deregistration must take place immediately. As soon as the trader ceases to exercise the trade or relocates the Business, he must immediately notify the competent authority.
Who must deregister their Business in Germany?
Trade deregistration is always necessary if you give up an independent trade with a fixed place of Business (in the so-called “standing trade”).
Such cases include:
- You wish to terminate altogether or discontinue your trade operation.
- You move the head office of your Business or a branch or dependent branch of your Business to a new location outside the municipality (outside Berlin). In this case, you must deregister your trade with your previous competent regulatory office in Berlin. Then re-register the Business with the trade authority at the new location in the new municipality.
- change the legal form of your trade. Deregister your Business under the previous legal form. Then re-register your trade with a trade registration under the new legal form.
- If your trade remains in existence and you only wish to notify the partial cessation of individual trade activities, you can voluntarily notify this through a trade re-registration.
- Suppose you move the head office of your Business or a branch office or dependent branch of your business within the municipality to a new location. In that case, it is sufficient to submit a trade re-registration to the new business location’s Ordnungsamt (local council).
Why should I deregister my Business in Germany?
According to § 14 Gewerbeordnung (GewO), every trader is obliged to notify all changes concerning his trade. You must deregister your trade at the same time as you end your business activities, move to another community (outside Berlin), or change the legal form of your trade.
The Trade Licensing Office notifies the tax office, the Chamber of Industry and Commerce, the Chamber of Crafts, if applicable, the registry court, and the responsible employers’ liability insurance association you have deregistered your trade. For this reason, trade deregistration must also take place when the trade is discontinued.
How do I deregister my Business in Germany?
Either informally in writing or in person at your Trade Licensing Office. It is also possible to deregister your business online. To deregister, you must fill out the trade deregistration form and sign it, as well as submit your current trade license, ID card, and confirmation of registration (when moving abroad).
The trade deregistration form is available online as an online download from many cities.
In most municipalities and cities, trade deregistration is free of charge. Deregistration of trade is free of charge in almost all cities. There are only a few cities that charge a small fee for deregistration.
Online Business Deregistration with SympatMe
With SympatMe, you can book our deregistration assistance. We will guide you through the German forms and explain where to send your business deregistration in writing. In some cases, Trade Licensing Offices now offer the option of deregistering your business online. We can also assist you with this process.
If you want us to deregister your business entirely on your behalf, that is possible too. In this case, we fill in all documents, send them to the Trade Licensing Offices, and we receive your final documents. We keep you informed throughout the process and provide you with copies of your business deregistration via Email. For an additional 29 Euros, we can send your original documents to your new address abroad. Shipping fees may apply additionally.
What should I do if I forget to deregister my Business in Germany?
It is possible to deregister or re-registered retroactively. If the deregistration is made retroactively, you should know that you may have no longer exercised the trade as of the specified date. Authorities do not track the day when a trade has been deregistered. Nevertheless, all traders should observe a certain limit. In general, anyone who deregisters their business more than three months late can risk a fine.
If you forgot to deregister your business, no problem. We will gladly do the work for you. You do not have to worry about anything.
To deregister your business, we need the following documents:
- Copy of your business registration
- Deregistration confirmation from Germany
- Signed power of attorney (for Full Business deregistration Service)
After placing your order and providing the required information, we will guide you through the documents and assist you with sending your business deregistration.
What happens to my inventory?
Existing inventory (vehicles, machines, tools) is not a problem when deregistering the business. Still, it must be treated appropriately in the accounting and the determination of profit so that the business is terminated on a certain date and can be deregistered. In principle, you can either sell the inventory or take it out of the company and use it for private purposes.
Perhaps scrapping comes in addition to pretty old, unusable items. In any case, however, you must remove the accounting value of the inventory from the accounts. However, this is only half the truth; in reality, there is still revenue from the written invoice when the inventory is sold.
If you intend to continue using your old inventory privately, you must still consider the current market value. The value is determined roughly by what a third party would pay for an object? If you cannot answer this question first, comparison portals (eBay, Amazon) or comparative sales are often used to find the value.
If in doubt, you can also estimate the value. However, you must never make the mistake of simply sweeping this business transaction under the table and thus setting the partial value at “0 euros”. The tax office would notice this immediately in an audit and would undoubtedly correct your unreasonable value, perhaps even charge a fine.
However they decide: Very often, so-called hidden reserves are revealed by company liquidations or trade deregistrations (the vehicle is in the books with a book value of one euro but is sold for 1500 euros when the business is deregistered => disclosure of hidden reserve in the amount of 1,499€, which of course must be taxed as income (profit from trade) in your income tax return. Also, on this topic, I can recommend you a serious and trustworthy tax advisor who will advise you well in your case.
Informally trade deregistration is possible
The deregistration of trade is quite simple. Appropriate forms are available at the trade offices, or you can download them from the administration’s website. The trader can fill out the form at home in peace and take it to the authorities already signed, and it usually saves time on site. With this in mind, there have been more and more offers in recent years to deregister a business online. Find out about the possibilities in your city/municipality!
As a rule, the authorities do not charge any fees for deregistration. The authorities automatically take care of the notification to other competent authorities, such as the tax office, chamber of commerce, or employers’ liability insurance association. The trader does not have to take any further steps here. However, deregistration does not automatically delete the commercial, cooperative, or association register entry. Anyone who has registered their business in one of these registers must commission a notary public to initiate the necessary steps for deletion.
These documents are required
Many trade offices offer an informal way to indicate this in the case of trade deregistration. The trader must bring the following documents to deregister his trade:
- Trade license
- Current confirmation of registration
- identity card or passport
- Possibly a copy of an excerpt from the commercial, cooperative, or association register
Depending on the type of business, the authorities may require additional documents. You can find out precisely what these are on the websites of the respective authorities.
Granting power of attorney
If you cannot appear in person, you have the option of granting a power of attorney. In this way, a third person can carry out the business deregistration. In principle, there is no formal requirement for a power of attorney. However, the written form is preferable for visiting the office since many offices do not recognize the oral form. A simple wording stating who the authorizer is and to whom he grants a power of attorney is sufficient. It must be explicitly mentioned in the power of attorney what a power of attorney is to be used for, for example, deregistering a business. The authorized person must bring all the documents required for deregistration and also present a valid identity card or passport.
“Suspended registration” as an alternative
Before deregistering your trade, you should carefully consider whether you want to deregister the business irrevocably and entirely. You may want to revive the company at some point. In this case, there is the possibility of making a so-called declaration of suspension. It suspends the trade for an indefinite period. However, it is not the Trade Licensing Office that is the correct contact for the declaration of suspension, but the tax office.
Deregistration of the trade means at the same time that all associated licenses also expire. If the business is only suspended, this is not the case. If you resume the trade after some time, you do not have to reapply for all concessions when declaring the business dormant. In many cases, this involves a considerable amount of work. As long as the declaration of suspension is active, the trader is typically released from all obligations trade entails. However, it is possible to resume the business without much trouble.
Deregistering a trade: What happens to my private health insurance?
If you take up another trade in return or do not give up your status as a self-employed person, you can continue to enjoy private health insurance benefits. Even if you seek employment again, you can remain in private health insurance if your income is above the compulsory insurance limit (in 2020, this is 62,550 euros per year or 5,212.50 euros per month). In any case, a PKV comparison is recommended to be able to use the best and most favorable insurance coverage for yourself.
Deregister your trade: This still has to be done!
An essential formal task is done when the trade is deregistered at the responsible office. The trade office will usually inform the tax office automatically, so you do not need to be active in this regard. If there are any questions later, the confirmation of deregistration is a document that can be used as evidence. Of course, tax obligations do not expire on the day of deregistration. Other things may need to be done after trade deregistration concerning the business operation. The following checklist will help you keep a better overview and not forget anything.
Checklist for business deregistration: Have I thought of everything?
Deregister your business with the appropriate office (online registration may be possible).
When discontinuing business operations: inform customers and suppliers in good time and terminate contracts in due time (rent, energy supply, etc.), and:
- Set up a forwarding order if the business is moved to a new address ✓
- Cancel memberships if other projects are being pursued in the long term ✓
- Delete or update the Internet presence of the business enterprise ✓
- If necessary, deregistration from GEZ and GEMA fees (depending on the business operation) ✓
- Disposal of the business operation in the most advantageous way possible✓
Many steps are involved in closing a business, with business deregistration being the final step. Much of what you need to complete during business deregistration is tied to specific deadlines. Therefore, it is essential to deal with the issue early on to avoid problems during a business cessation. During the process, for example, long-term contracts need to be terminated. Learn more about contract cancellation:
- Contracts with telephone and Internet providers
- Insurance contracts
- Framework agreements with customers or suppliers
- Lease agreements and the associated energy supply contracts
- Advertising contracts
- Bank accounts
- Powers of attorney
The trader must determine the abandonment profit or loss and report it to the tax office. A tax consultant can be of great help here. The employees must also be given notice. It is essential to observe deadlines here to avoid further problems. A termination agreement can be an excellent alternative to termination in some cases.
Good to know!
In principle, the procedures for deregistering a business are not uniformly regulated throughout Germany. You will have already noticed when registering your business that the costs for this administrative act are not uniformly held. Therefore, you should find out the general conditions and possibilities on-site early.
FAQ: Deregistering a trade – What you should know
When do I have to deregister a trade?
If you want to discontinue the business permanently, you must deregister it, or if you are relocating it to another city. Leaving a partnership (such as an OHG or GbR) can also lead to trade deregistration.
Is there an obligation to deregister a trade?
Yes, Section 14 of the Trade Regulation Act stipulates that you must report changes to the trade immediately. Incidentally, traders act out of their interests. The obligation to pay (business) tax ends with the deregistration. Remember, you must still take sales generated up to the date of deregistration into account in the upcoming tax return or trade tax return).
Deregistering a trade: Costs for this administrative act?
The deregistration of a business is an administrative act subject to costs. The costs are not uniformly regulated throughout Germany; they range between 20 and 25 euros. In some cities and municipalities, business deregistration is free of charge.
Can I deregister a business online?
Pure online deregistration is not yet possible everywhere but has been rising for several years. In North Rhine-Westphalia, a trade can be deregistered fully electronically, but this requires prior registration. For example, the new ID card’s online function can be used for legally compliant legitimation. If documents are needed for deregistration, you can usually upload them. Alternatively, trade deregistration can also be completed traditionally. However, many municipalities already offer the required form for business deregistration online for download. The signed form must be presented in person with a current ID card.
Deregistering a trade: What is the alternative?
You can also suspend a trade upon request. In this way, you can bridge a certain period and resume your business at a later date. This alternative is advantageous in that any licenses do not expire. New costs would arise again after trade deregistration and a re-decision after a few weeks. This alternative is the so-called notification of suspension, for which the tax office is the correct contact.
Do I have to deregister a trade personally?
Yes, this is generally the case. However, if you are personally prevented from doing so for fundamental reasons, you can issue a power of attorney for an authorized representative.
Please keep in mind that we do our best to provide credible and up-to-date information, but we are not an official advisor (in the sense of the Legal Services Act, RDG) for taxes, legal matters, and the like. Our service does not replace an individual consultation with legal assistance, and we provide digital tools and automated workflows to assist with the residence deregistration and related necessary steps.
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