10 December 2023, Osnabrück Germany
One of the major barriers to founding this company was how to actually register it with all shares correctly and legally attributed to each coffee producer. This journey turned out to be a significant bureaucratic headache that hasn’t ended yet. As I am not native to Germany either, I honestly did not have a clue how to set up a "GmbH" or "Limited Liability Company". With a limited budget I did not want to hire much legal advice and set out to decipher all the steps myself. This started in May 2023 and if all goes well by the end of December 2023 we should have most registrations ready. Here is a short and to-the-point version of what we went through to make this company happen.
Step 1: Articles of Association
Write and approve the articles of association. This lays out our rights and obligation to each other, the company and the state. Finalising and finding agreement in this document took us about two months. A notary public helped us to make it legally applicable in Germany.
The first draft of articles of association
Step 2: Signing the Articles of Association
Each shareholder must sign the articles of association at the notary’s appointment. As most of the shareholders reside in Central America this had to be done through Powers of Attorney, written out to Bram, to sign on their behalf. Through six appointments at the German embassies in Costa Rica, Nicaragua and El Salvador we completed this step in about six weeks, finally mailing them physically to Germany. Then the articles of Association were signed at the end of August.
Step 3: Receiving the capital payments
To receive the committed capital the new company can be officially entered into the commercial registry at the court of Hannover. However, to open a bank account shareholders must comply with many rules and regulations from the banks. With so many foreign shareholders not many banks were willing to open an account for us. This would stop the process dead in its tracks since without capital payment we would not officially become a company. Finally, after twelve unsuccessful applications we were accepted by a digital bank. From here we could receive the capital payments through international wire transfers. The transfer from Nicaragua proved to be the most complicated, not arriving until after one month.
Step 4: Registry in the commercial registry at the court of Hannover. Finally, after sending all our documents to the court we received the relieving news that we now finally exist as of 23 November 2023.
Step 5: With our commercial registry in the pocket we could finally apply for all other registers, which seem to be infinite in Germany. Among others: the trade registry, tax institution, VAT institutions, agency for employment, registry for packaging, customs registry for coffee storage and processing and many more.
Step 6: We now exist as a company and could not be more excited to launch our brand: Paso a Paso in the coming weeks and start delivering our coffee.
Fun fact:
If we would have planted a coffee tree on the day we had the idea to start this company, it would have grown enough to give us a small harvest now that we are ready to roast it.