What does “entry in the commercial register” mean?
An entry in the commercial register is mandatory for merchants, an OHG and for corporations such as the GmbH. The commercial register is a directory that is publicly accessible and provides information about the economic situation of the registered company. By being entered in the commercial register, the company also protects its company name.
What exactly is the commercial register?
According to gradinmath.com, the entries of the registered traders in the area of the competent registry court are documented in the commercial register as a public directory. Anyone can view the commercial register, which contains information about the essential economic circumstances of merchants and companies. This information includes, for example, the balance sheets and annual financial statements. Since 2007, the commercial register has been kept exclusively electronically, and registration and entry are also carried out electronically. The entry in the commercial register is published in the electronic company register.
If a company is registered in the commercial register, the company name is protected against similar sounding company names. It should be noted here that only companies that are entered in the commercial register are allowed to use a company name.
What information is recorded in the commercial register when a company is founded?
Not every company has to be registered in the commercial register. For example, anyone who wants to work as a freelance graphic designer or found a GbR with a friend does not need to be entered in the commercial register. But in this case it is important that the tax office is informed and / or the trade is registered with the trade office. While registration is not mandatory for small businesses and freelancers, some companies are subject to this obligation. These include, for example
- OHG – open trading company
- GmbH – limited liability company
- AG – stock corporation
Anyone who founds a company should remember the following rule of thumb: In principle, the companies in the commercial register belong to the companies whose operation requires a “commercially organized business”. Anyone who is not sure whether this applies to their own company, which exists or is being founded, can obtain information from the competent registry court. There is a contact person there who can provide information on whether the entry is necessary and what it costs. In addition to the corporate form, the company’s key economic data, such as the number of business transactions and annual sales, are noted. In addition, the following details are also entered when the company is founded:
- The company name
- The legal form
- The registered office of the company – business address
- The addresses of the branch (s)
- The purpose of the company
- Authorized representatives (depending on the type of company, managing directors, authorized signatories, etc.)
- The share capital
It is important to know that if an entry in the commercial register has been applied for, but this has not yet been done, the company name will also be given a corresponding, identifying addition: “In formation”.
Registration is also important for existing companies
An entry in the commercial register is used by third parties to get an overview of a company, for example via the extract from the commercial register. It is therefore logical that an entry should not only be made when the company is founded, but also during the course of the company’s activities, for example if there are serious changes to the company. These must be communicated to the registry court, whereby the entrepreneur can also contact a notary who will then take all the necessary steps. The entrepreneur is then only informed by the registry court that the process has been completed and the entry has been made.
How is the entry in the commercial register made?
The registration for the commercial register must be certified by the notary and that means the entrepreneur has to contact a notary who will then take over the necessary formalities for the entry in the commercial register. As a rule, the following information is required for entry in the commercial register:
- The entrepreneur must register his company and the company name
- The registered office, branches and branches of the company with details of the corresponding addresses also belong in the register
- The company’s purpose is also part of the entry
- The persons authorized to represent and their powers of representation are also entered in the commercial register
- In addition, the legal form must be specified
- In addition, the amount of the share capital must be entered there
If there are changes, a branch is opened or the company is deregistered, the registry court must be informed so that the entry in the commercial register can be changed. As a rule, the managing director must ensure in writing that there are no obstructive circumstances, such as a conviction for delaying bankruptcy.