Following Up

Following Up

Fountain Pen and Checklist | © iStockphoto

Source: Fountain Pen and Checklist | © iStockphoto

Disclosed Information

German commercial law requires businesses to provide basic information about their identity on all official correspondence, such as letters, emails, and invoices. Website operators need to disclose the same information in an easily accessible imprint. For instance: Small businesses that are not entered in the commercial register need to provide the following:

  • Name of the entrepreneur as well as partners, if applicable
  • The official address.

Medium sized and large businesses as well as commercial corporations additionally need to furnish the following information:

  • Registered company name,
  • Legal form,
  • Address of the registered office,  
  • Commercial registration number and court of registry,
  • Tax identity number and/or turnover tax number

Similar disclosure requirements apply to the regulated liberal professions, which roughly include the medical professions, legal and tax advisers, accountants, freelance engineers and practitioners of the fine arts. Limited liability corporations and stock corporations need to disclose the name of the chief executive officers as well.

Moreover, the EU Services Directive stipulates, that service businesses have to disclose the same information before concluding a contract, regardless whether it is concluded in written form or orally. Further disclosure duties regarding the price and legal framework apply upon request from request of the contractor.

Identity Verification

The primary sources for business identity verification in Germany are the Commercial Registers of the local courts that are conveniently available online. All businesses with a turnover above a certain threshold are required to keep accounts and records as well as register. Limited liability and stock companies are also recorded, as the Commercial Register also contains the Register of Companies. The only exceptions to this are agricultural businesses and the liberal professions.

The Commercial Register contains the following data:

  • official name and official address of the company
  • corporate objects
  • legal form
  • proprietor/s or shareholder/s
  • information regarding legal representation
  • shareholdings and annual financial statements of corporations
  • opening of insolvency procedures in the event of insolvency

The entries are notarized and filed by a notary public at the Commercial Register of the competent municipal court (Amtsgericht). These municipal courts also maintain the registers for professional partnerships (Partnerschaftsgesellschaft) and cooperatives (eingetragene Genossenschaft - e.G.). Entries can be inspected by anyone for a small fee. The entries are also available free of charge via the official website of the Commercial Register or through the online Company Register.

Furthermore, the local Commercial Trades Offices (Gewerbeämter) maintain Registers of Commercial Trades (Gewerberegister) containing basic information of all local businesses. Although these registers are technically not open to the general public, the local Commercial Trade Offices may answer formal requests regarding the name, address and description of the object of a business enterprise. Since every permanent commercial undertaking in Germany has to register with its local Commercial Trades Office, the Registers of Commercial Trades contain all business activities except the liberal professions.

In addition, many industry associations or professional chambers offer a member database that may be browsed to validate the information provided on a business. The official online-registers of the regulated liberal occupations may be helpful to check whether a provider is entitled to do business.

Creditworthiness/Factoring

Sellers who are insecure of their business partner's solvency status have several ways of verifying the company's financial situation:

They may obtain a reference from the trading partner's bank as long as the trading partner is listed in the commercial register. The bank reference contains general information on the creditworthiness and solvency of the relevant client. However, only customers of the same bank can ask for a reference. Many German banks offer these services via internet.

They may also engage agencies specialized in account solicitation services. To be on the safe side, it is possible to sell claims to factoring agencies, some of whom work in international networks of corresponding agencies.

If the partner is a private or public limited corporation, annual financial statements are available free of charge in the commercial register. The same data can also be accessed via internet at the electronic company register (Unternehmensregister).

Insolvency cases are generally reported to the commercial register and announced publicly by the local courts. In addition, the local Chambers of Industry and Commerce offer debtor listings (Schuldnerlisten) which contain data about local entrepreneurs, who pleaded indigence under oath or whose insolvency proceedings had been rejected due to lack of assets.

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