The conversion of an existing sole proprietorship into a GmbH is tax attractive both with and without holding structure. As an entrepreneur, you have until 31 August 2024 to convert your individual company into a GmbH – and this retroactively to 31.12.2023. What at first glance sounds like a lot of time, however, can quickly become scarce in practice.
With their (first) sole proprietorship, many self-employed lay the foundation for later and, at best, ever-increasing success. Sooner or later, the tax burden increases to up to 45 % of the profit, with additional solidarity surcharge (“Soli”) and, if necessary, church and business tax. As a result, a tax burden of more than 50% quickly arises. But also beyond the tax burden, the individual company has various disadvantages:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.