03 - Trade and Names

Question 1

What is the definition of Trade?

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Answer 1

• Any independent activity geared toward makinf a profit is called a trade.
• Anyone who starts an independent trade is obliged to notify the respective local authority (municipality)
• the authority issues a receipt

Question 2

Does the founder always need a special (positive) permission?

Answer 2

• for many trades, not!
• they also often don´t have to prove amy particular quialification
• the notification of the trade (as recognised by the issuing of the recepit) is enough to be legally able to conduct buiness as a trader

Question 3

What are the exceptions for specfic trades that do require a permission?

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Answer 3

• crafts trades: master craftsman certificate (meisterprüfung)
• trading enterprises, if they deal with sensitive or dangerous goods like weapons, explosives or milk: proof of special training is required
• transport companies: all activites in this sector have to be positively permitted
• certrain sevices: e.g. credit agenices, real estate agents, auctioneers

Question 4

What are the different types of commercial/ business names?

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Answer 4

• personalised name - personenfirma (all these persons must be fully liable owners plus the so-called obligatory supplemet, like KG or e.Kfr.)
• articifical names, often derived from product. e.g. cola
• objective names (indicates the main trade in which the company in active, e.g. beamten-bank AG)
• mixed names, combinations, e.g. Möbel schmidt OHG

The abbreviated legal form MUST be put at the end of the commercial name!!

Question 5

What are the guiding principles regarding Commercial/ Business Names?

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Answer 5

• truth: the name has to be true at the moment the company in set up
• clarity: the name needs to be distinguished from others, and must not be misleading
• continuity: if the proprietor of a company changes, the name may be kept
• exclusivity: every business name must be different from any other business name already registered within a registry district of the commercial register (handelsregisterbezirk)

Question 6

What is the Commercial Register?

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Answer 6

• official directory of merchants and trader for the area of responsibility of the local district court (or several) that is maintained by the courts in electric form
• purpose is to reduce uncertainties for and in dealing with businesses
• has two sections: A (sole traders and proprietorsmand pertnerhsips) and B (incorporated companies)

Question 7

What kind of effects have entries into the commercial register?

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Answer 7

• constitutive effect - direct legal consequences
• purely informational character - when a legal process has already taken place and effect, so its just for documentation