Reasons for unemployment: the trick with the UG

Content

• A guest contribution by Jennifer and Christian Juraschek
• Reasons for unemployment: apply for a start-up grant
• The problem with the extra income
• Continuation of a long-term self-employment
• Set up a corporation parallel to unemployment
• A calculation example
• What is a corporation?
• Advantages of a corporation
• How do you set up a corporation?
• Notarial certification, business account and business registration
• What does it cost to set up a corporation?
• The UG trick: What else to consider
• About the authors

A guest contribution by Jennifer and Christian Juraschek

If the job doesn't work out, some people decide to start a business out of unemployment.A brave step that the Employment Agency is even promoting with a start-up grant. However, only those who register as unemployed and are entitled to unemployment benefit I for at least 150 days will receive this. There are a few catches, however. So it's a good trick to do one first To found a corporation and to build up his company at the same time. Here you can find out why and how it works ...

Reasons for unemployment: apply for a start-up grant

If you would like to apply for the start-up grant, the employment agency requires the following documents:

• Their Business plan, which credibly demonstrates that banks would also be willing to support your business idea with financial means
• The submission of a so-called Load capacity test, in which a bank, the Chamber of Commerce and Industry, a management consultancy or the Chamber of Crafts will give your business idea a good rating
• Proof that you are actually able to work independently (this can be done, for example, by means of a certificate of participation in a Business start-up seminar which is offered by the employment agency or the Chamber of Commerce and Industry, among others)
• Your Registration certificate about self-employment at the trade office

Those who meet the requirements for a start-up grant and receive the grant can in addition to their unemployment benefit for six months 300 euros per month to build his independence.

If you can prove after the six months that you are now living from your self-employment, the grant can be changed another nine months be extended. The payment of the unemployment benefit is then not applicable.

But there is a catch: the start-up grant has been approved at the discretion of the employment agency. The responsible agent at the employment agency alone decides whether your business idea is worthy of funding.

Since the primary task and aim of the employment agency is to find you back in a job subject to compulsory insurance, it can be difficult to receive the start-up grant. Business start-up grants are usually not granted, especially if you are well educated and young. Then the employment agency sees more opportunities in placing you back into a permanent position. The start-up grant is therefore - officially - only one Can performance the employment agency. There is no entitlement to this.

The problem with the extra income

If you receive unemployment benefit I, you are entitled to an additional income of up to 165 euros per month earn additional money. So you are allowed to work as a self-employed person - parallel to unemployment. This right is regulated by law in Section 155 of the Third Social Code.

However, there is also a small catch here: If you earn more than 165 euros per month, the additional earnings will be deducted from unemployment benefits. So if you receive unemployment benefit I, for example 1,500 euros, you can increase this to a maximum of 1,665 euros. For example, if you earn 500 euros from your additional income, the employment agency will only pay you 1,330 euros. Your unemployment benefit will be reduced by the 335 euros that you have above the 165 euro limit earn additional money.

In addition, the self-employed sideline must less than 15 hours per week lie. It is true that you have to send the weekly working hours Self-disclosure specify yourself. For example, in the form of invoices for jobs for which you are paid on an hourly basis (as a freelancer or freelancer). But there are hardly any big leaps in these regulations. Provided that you want to continue to enjoy ALG I to the full.

Now, unfortunately, an additional 165 euros won't help you too much when starting a business out of unemployment. If you want to build your own business or a passive income, you will most likely need more than 15 hours of work per week. And this is exactly where it comes in Corporation in the game…

Continuation of a long-term self-employment

If, for example, you were working part-time as a freelancer 18 months before you became unemployed and can prove this, you can earn more. Another requirement is that you have been self-employed for at least twelve months.

In this case, there is no longer a classic start-up. But you can take the chance to expand your business too focus. Perhaps you did not have the right concept up to now or you did not have the time to do the self-employed activity in such a way that it can also secure your livelihood.

The amount of possible additional earnings to unemployment benefit I depends on how high your income was from the part-time self-employed activity in the past twelve months.

Set up a corporation parallel to unemployment

To make it short: The Corporation is (still) a kind Insider tip and trick, if you earn more than 165 euros per month. Because before the employment agency deducts the extra income from you, you would surely prefer to keep the additional income, right?

This is possible by founding a corporation. Because how much profit the employment agency is not interested in this corporation. The only decisive factor for your unemployment benefit I is how much additional income you will pay off from the corporation.

For example, you can use it as a employed managing director be active in your corporation and pay off a monthly salary of 165 euros. The maximum weekly working time of 15 hours then also applies here.

You can of course also run the corporation without paying anything off. It actually is even better, because the employment agency will then be even less interested in your corporation. If you don't pay off, you don't even have to inform the employment agency about the establishment of the corporation.

If the corporation beyond that Profit made, this can remain in the corporation. You can then use the profit to make investments, for example. Or just leave the profit in the company.

At the end of the financial year, the corporation must of course pay tax on the profit. But in this way you create a financial basis for your company that you can use perfectly after unemployment.

A calculation example

Let's assume that your corporation generates a turnover of 1,500 euros per month. If we assume that you can officially work a maximum of 15 hours per week, you are entitled to approx 60 hours per month to disposal. In order to earn 1,500 euros in this time, you would have earned an hourly turnover of 25 euros if you worked 60 hours.

Let us also assume that the corporation is monthly costs caused by 500 euros. These costs could come about, for example, through hiring a tax advisor for your accounting, through software usage costs or the like. If, as an employed managing director, you then pay yourself a monthly salary of 165 euros, of the 1,500 euros in sales, 835 euros remain as profit in the company.

If you are acting without a corporation, you would have to state the 835 euros as additional earnings. So your unemployment benefit I would be around 835 euros shortened and the additional earnings would not have any financial added value for you at this point in time.

So it is better for you if you keep the 835 euros in the company. Depending on what you do, you can, for example, buy machines or work materials through the company, invest in better software or the money "save up" for the period after unemployment.

The taxed profit is of course available to you after unemployment and you do not have to provide the employment agency with any information about how the profit was used.

With a corporation you consolidate your planned independence, increase your net income and are not additionally dependent on the employment agency.

What is a corporation?

A corporation is a possible form of company with an economic purpose. It is used to make a profit. In addition, the corporation is a legal personwho is allowed to conclude legal transactions. As a rule, the managing directors of the corporation and, if necessary, other persons appointed by the managing directors are entitled to do this.

In Germany there is essentially two forms of the corporation that are relevant for start-ups:

1. The Limited Liability Company (GmbH).
2. The Entrepreneurial Society (UG), which is a sub-form of the GmbH and is often referred to as Mini-GmbH or 1-Euro-GmbH.

For the sake of completeness, it should also be mentioned that the Joint-stock company) as well as the Limited partnership based on shares (KGaA) count among the corporations.

Advantages of a corporation

The main advantage of a corporation is that the shareholders do not stick with their private assets. For example, if the company has debts that can no longer be paid, you do not have to pay that debt privately.

The situation is different if you set up a partnership (e.g. a partnership under civil law) or a sole proprietorship. Then you are also liable with your private assets.

You can either set up a corporation alone or together with other shareholders carry out. Even if you set up a business on your own, you always have the option of employing employees through the corporation later on. This is not possible with a sole proprietorship, for example. Thus, with a corporation you keep many paths open without taking the financial risk of private liability.

For start-ups, this is often the most common Entrepreneurship Interesting. Because theoretically a deposit of one euro is enough. With the next larger corporation, the GmbH, you have to bring in at least 12,500 euros of capital in cash or in kind at the beginning. However, the liability with a GmbH amounts to 25,000 euros, so that you are then still privately liable with 12,500 euros. A UG is therefore more advisable for setting up a business out of unemployment.

How do you set up a corporation?

To set up a corporation is a must in any case Entry in the commercial register required.

In order for this to take place, you must first enter a Social contract put on and have this notarized. This contract defines the legal basis for the company. As an alternative to the articles of association, a so-called sample protocol is also possible.

A Sample protocol is a shortened articles of association that do not allow any deviating provisions. The main advantage of a sample report is that you save time and thus costs. For this, however, you are less flexible compared to the articles of association. If you are the sole founder, the use of a sample protocol is definitely recommended. Since individual regulations are often desired in the case of several shareholders, a partnership agreement is used here.

There are two forms of the sample protocol: the sample protocol for the one-person formation (PDF) and the sample protocol for the multi-person formation (PDF) with a maximum of three shareholders.

There is also a social contract on the Internet free samples such as the company model contract of the Stuttgart Chamber of Commerce and Industry (PDF) for several founders.

There are no formal rules for the articles of association. It is nevertheless advisable to consult a lawyer here.

Notarial certification, business account and business registration

Both the model protocol and, alternatively, the articles of association must notarized become. After the appointment with the notary you will also need a Open a business account and deposit the capital contribution to this business account. The capital contribution is the money that you, as a partner in the GmbH or UG, bring into the company from your private assets. In the case of the GmbH, contributions in kind (e.g. a laptop) are also possible.

You can only proceed with the next steps once you have verified that the capital contribution has been paid into the business account. The Registration in the commercial register is then carried out by the notary and takes a few days to weeks. You will be informed accordingly by the notary that the entry has been made.

After the corporation has been entered in the commercial register, you must also enter a Register business. For this purpose, the respective municipalities have a trade office or a trade office. Often this is integrated in the citizens' office. You have to go to the trade office of the municipality in which your corporation is based. To register the trade, fill out a form on site, which you also sign.

In some municipalities, it is now also possible to register a business online.

What does it cost to set up a corporation?

How expensive it is to set up a GmbH or UG depends above all on whether you use a sample protocol or a articles of association to establish it. Since a partnership agreement is usually much longer, the notary fees are higher here. If you use a sample protocol and set it up on your own, you can expect the following costs:

• Notary fees: Around 100 to 120 euros
• Costs for the entry in the commercial register: 150 euros
• Business registration costs: Around 20 to 30 euros (this varies depending on the municipality)

In the best case scenario, the total costs are therefore about 270 euros. If you are setting up with several partners and a multi-sided partnership agreement, the costs can also be up to 800 euros. Opening a business account is usually free.

The UG trick: What else to consider

Unfortunately, founding a corporation does not only bring you advantages. With a GmbH or UG, you also enter into obligations. For example, with the corporation you are in accordance with Section 238 of the Commercial Code obliged to keep accounts. So you have to prepare annual financial statements as well as a balance sheet and an income statement (P&L).

You can either do this yourself or you can commission an expert such as one tax consultant. Of course, this also costs money.

In addition, you pay fairly with a corporation compared to other forms of business lots of taxes. A corporation tax of 15 percent is levied on the profit, which is also taxed with a solidarity surcharge of 5.5 percent. Profit distributions are subject to a 25 percent flat tax and a 5.5 percent solidarity surcharge.

You must also have a Business tax Pay to your community, which is also dependent on the profit. The percentage varies from municipality to municipality. A trade tax exemption, which partnerships can use for example, unfortunately does not apply to corporations.

Provided no profit is achieved, but even a corporation does not pay any taxes. Regardless of the profit, however, the bookkeeping including P&L, balance sheet and annual financial statements must be prepared, which can cause costs for the company.

If a profit is achieved, you are also obliged to set up 25 percent of the annual surplus as a reserve with a UG. You can freely dispose of the remaining 75 percent. These Formation of reserves must be carried out until a share capital of EUR 25,000 has been reached. From this point on, you have the option of converting the UG into a GmbH.

Overall, a corporation is not necessarily the cheapest option for running a company, even in the long term. That's what yours is for Private assets largely protected and you have every opportunity to build a successful and large company with employees.

If you are aiming to start a business from unemployment, it depends above all on yours Willingness to take risks at. When you are sure that your business idea will work, think big from the start. Then the path to founding a corporation is promising for you. You can then actually take advantage of unemployment to reduce Foundation stone for a successful company to lay.

However, if you are still unsure whether you can make a long-term living from your self-employed activity, an additional income as a freelancer is initially better suited. You can up to 15 hours per week Do your part-time job and thereby increase your unemployment benefit. This gives you time and financial protection to first try out whether your self-employed activity will bring the desired success.

Whichever route you choose, you should Start implementation as early as possible. The twelve months in which you are entitled to unemployment benefit-I pass quickly. The sooner you start, the better your chances are that you will be really successful in starting your own business out of unemployment.

About the authors

Jennifer and Christian Juraschek work anywhere as digital nomads. On your blog unaufschiebbar.de you give tips on traveling and working from anywhere. You both studied business administration and completed your studies with a bachelor's and two master's degrees. After your career in large, internationally active companies, you decided to start your own business.