Sole proprietorships are often started by solo entrepreneurs. They own it entirely and are fully liable, even with personal assets. Starting is cost-effective and can occur without or with any capital.
Kleinunternehmerregelung (Small business owner regulation) - from 2025, the turnover limits increase to €25,000 for the previous year and €100,000 for the current year. When invoicing, you must include the note: “Gemäß § 19 Abs. 1 UStG wird keine Umsatzsteuer berechnet.”
Partnerships require at least two participants. All are personally and fully liable with their personal assets. A capital contribution is possible but not mandatory.
Corporations focus on the capital contributed. They strictly separate the company and shareholders. At least two participants are required, and a capital contribution between €1 and €50,000 is mandatory. Liability is through corporate assets.
Choosing a legal structure has personal, financial, tax, and legal implications. It should be well-considered, not just for the startup but also for the future. A company form that's perfect at the start of your self-employment might later become a disadvantage due to business changes.