Einzelunternehmen (sole proprietorship)
An Einzelunternehmen is a German sole proprietorship - a business owned and run by one individual, with no separate legal entity and unlimited personal liability, comparable to a US sole proprietorship.
The Einzelunternehmen is the default form for a single founder: simple to start (a trade registration, or nothing for freelancers), no minimum capital, and the owner keeps full control and all profit. The downside is unlimited personal liability. A larger Einzelunternehmen registered as a merchant adds "e.K." (eingetragener Kaufmann) to its name. There is no German entity to "bring" to the US - the owner simply forms a US business when they expand.
Frequently asked questions
- What does "e.K." after a name mean?
- "e.K." stands for eingetragener Kaufmann - a registered sole trader entered in the commercial register. It is still a sole proprietorship with personal liability, just a registered, merchant-status one.
- Is a freelancer (Freiberufler) an Einzelunternehmen?
- Freelancers in the "liberal professions" (doctors, lawyers, engineers, etc.) operate as sole proprietors too, but are not considered a trade (Gewerbe) and so skip the trade registration and trade tax. Liability is still personal.