Why won't the bank open a bank account for the Operative GmbH after opening one without problems for the Holding Company? (Part 7 of Founding a Company)
Introduction
In this seventh article - if you have not read it, start with the first article - I continue telling you about the highlights of incorporating two companies in a holding structure in Germany. This article focuses on the back and forth between the bank for opening the bank account for the operative company.
In follow-up post(s) I'll continue with the need to create a contract with the managing director and further highlights until finally having both companies ready.
Hi 👋
This is Kai Mindermann, the CEO of NuInnovate - with the vision of creating a world where every improvement serves a meaningful purpose. Just wanted to quickly say: Enjoy your day!
Overview
One of the most important steps during the process of founding a GmbH in Germany is to transfer the nominal share capital (Stammkapital) to the bank account of the new company. Although there are some exceptions to it, that is the most common approach.
The bank account needs to be opened in the name of the new legal entity, as the money does not belong to you or anyone else than that company and needs to be handled separately. The concrete process differs between banks, but in general you need to provide basic company data including the certificate of incorporation and verify your identity. While a banking account for a natural person is often very cheap, you have to pay all kinds of charges for a business banking account, depending on the bank.
Bank Account Application Process
In the first step, after choosing which kind of bank account you want or need, they already distinguish between companies which have to be registered in the commercial register and those which have not. Obviously, I needed to select "My company is or will be entered in the commercial register" ("Mein Unternehmen ist oder wird im Handelsregister eingetragen"), for a GmbH. Then in the new web browser tab nothing happened, also not after the second try. When I had a look in the Browsers Console (where you sometimes can see more errors of dynamic parts of the website and more), I noticed some errors. I switched to a different Browser and there the form worked, or at least I got it to show (but, yes it worked there).
After registering temporarily with an email, I could enter the basic company data for opening a new bank account for the GmbH: This included, apart from the address and other information, the following:
- Name of the Company / Owner of the account, where you should make sure to include "i. Gr." (in Gründung / in formation)
- Legal Form: GmbH (also with "i.G.")
- Date of the notarized articles of association
- Certificate number (Urkundennummer) of the notarized articles of association
- A scan/copy of the articles of association and a scan/copy of the application to the commercial register
After I had navigated through the different steps of the online form and provided all information, I could send it.
After a few moments I received an email with the application information and the next steps. The next steps are the verification, which worked also online. The last step reads:
The following documents must also be submitted to us in the original or as a certified copy in order to open the company account:
Notarized articles of association
After we have reviewed the documents, we will send them back to the specified shipping address. When submitting your original documents, please be sure to use the shipping cover sheet in the appendix and enter your preferred shipping address in the field for return shipping. We can only guarantee a fast and uncomplicated process if you have added this information. If the desired shipping address is left blank or documents are submitted without a shipping cover sheet, it may take up to 3 weeks to return the original documents.
Für die Anlage des Unternehmerkontos ist es außerdem erforderlich, dass uns folgende Dokumente im Original oder als beglaubigte Kopie vorgelegt werden:
Notariell beurkundeter Gesellschaftsvertrag
Nachdem die Unterlagen von uns gesichtet wurden, senden wir diese an die angegebene Wunsch-Versandadresse zurück. Bitte nutzen Sie für die Einreichung Ihrer Originaldokumente zwingend das Versanddeckblatt im Anhang und tragen Sie Ihre Wunsch-Versandadresse in das Feld für den Rückversand. Nur wenn diese Information von Ihnen ergänzt wurde, können wir einen schnellen und unkomplizierten Prozess gewährleisten. Sollten die Wunsch-Versandadresse leer bleiben oder Unterlagen ohne Versanddeckblatt eingereicht werden, kann eine Rücksendung der Originaldokumente bis zu 3 Wochen dauern.
I mean this is okay, yet it takes some more time.
So far so good and that worked out pretty good for the Holding Company, but not for the Operative Company! Read further below for what I had to go through for the Operative Company.
No information from the denied account opening
So now what happened when I followed the same process as previously, but now for the Operative GmbH.
After some days I received, unfortunately, the following response:
Account opening currently not possible
Dear Mr. Mindermann!
Thank you for your interest in opening a business account with Commerzbank. We have received and checked your details for opening a business account. Unfortunately, it is currently not possible to open the business relationship and the associated business account. We apologize for the inconvenience.
Yours sincerely
Commerzbank AG
Kontoeröffnung aktuell nicht möglich
Sehr geehrter Herr Mindermann!
Vielen Dank für Ihr Interesse an einer Geschäftskontoeröffnung bei der Commerzbank. Wir haben Ihre Angaben zur Eröffnung eines Geschäftskontos erhalten und geprüft. Die Eröffnung der Geschäftsbeziehung und des damit verbundenen Geschäftskontos ist aktuell leider nicht möglich. Wir bitten die Umstände zu entschuldigen.
Mit freundlichen Grüßen
Commerzbank AG
As you can see, there is no mentioning of the cause for the denied opening of the bank account.
I right away went to the online form and did the application again with the same information. Afterwards, I again got the confirmation mail for the start of the process, verified my identity, and then prepared the mail with the copy of the notarized articles of association / certificate of incorporation and brought it again to the mailbox.
After I received the above message a second time, it left me puzzled about what was different with the operative company compared to the holding company, for which the process had been successful.
Researching possible causes and differences
The two main differences between the operative and the holding company are (1) the object of the company and (2) that the operative company is owned by a legal entity and not a natural person. I ruled out the object of the company as any cause because I thought it was just too irrelevant for the bank and was not related to anything I could imagine being of concern for the bank. The second possibility more though.
While I was originally researching which bank to go with in the first place, I also discovered that some banks don't support opening bank accounts for this kind of structure. It's often not stated directly on their front pages but often only described in side notes in the documentation, their General Terms and Conditions, their Frequently Asked Questions or even only in the community forums.
But I couldn't find anything like this for the Commerzbank. Also, their application process wasn't focusing on that.
After further thoughts about it, I had a hunch! You probably know that, when you open a second bank account or ask for a credit card, there is always the checkbox that asks for your consent to check your credit worthiness. A commonly known name with this topic, in Germany, is: SCHUFA. Did you know that they not only score natural persons but also legal entities?
At this time it was only a hunch, but I got on the phone with the business hotline, talked and button-pressed myself through the automated system until I got to a supportive human. I talked with her and asked what could be the cause for the denied application and that I'd really wanted to become a client. She found the application after a while and could not state directly what the cause was.
When I asked if it was because of some SCHUFA entry, she did not respond to that but explained that I could try to go through the application process again. I explicitly asked again if this could be a cause, but after a brief pause, she also did not respond at all to that topic and could only offer me to go through the process again, from the start. This beating around the bush was for me a clear sign that it could be because of a SCHUFA entry. What worried me was how could there be a bad SCHUFA entry already, and more so for me and/or the Holding Company?
Managing your company's SCHUFA- and Creditreform-Scores
I immediately tried to find out more for me personally. That was rather easy as there is the bonify-App, which after verifying my identity, showed me nothing surprising. Yet, that meant it could only have to do with the Holding Company. So I was still worried!
How would I find out the score of my own company? After a first search I only found resources describing it and the official service by SCHUFA to request scoring information of a particular (but any) company. I was about to order this, but first I had bought a yearly subscription, which then would allow me to buy that information. For my account to be usable I needed to wait for some confirmation code which was about to be delivered by mail!
While I was waiting, I continued to search and discovered the solution: Meet the Bonitätsmanager (engl. Creditworthiness manager)!
It is a free tool, which provides you access to a neat dashboard for companies for which you are listed (in the commercial register and similar) as authorized representative. With this I got access to the scores for the holding company for free! I immediately canceled the personal subscription I just bought.
I assume it's free because with the tool they can easier make sure to have accurate information for companies, which reduces risks or of course the accuracy of the information provided by SCHUFA or Creditreform.
When I first looked at the dashboard, the scores where not there. This was an interesting sign for me. There appeared to be no entry at all for the Holding Company, so no negative, neutral or positive entry but no entry at all. I was about to relax a little again.
The Bonitätsmanager not only has the dashboard but also lets you manage your credit worthiness, to some degree. It provides some inputs for basic company information, for you to confirm, which they send to Creditreform and Schufa to update the score. And regularly approving this information is apparently important for the score!
See in the following some screenshots of the "Optimize Overview" and one of the ways to update your score:
After I did that, I could see a score for the company from SCHUFA - I was happy! I was convinced, probably through the confirmation bias of all my thoughts, that this really was the cause and I would just have to inform the Commerzbank about the now existing entry.
Parallel process with another bank
I won't go into details for this second bank, but just so much: I needed to transfer the initial share capital on the operative company bank account to continue with all the formalities, timely. So I decided to already start the application process with another bank in parallel. Technically it's not in parallel, as the other applications were already denied, but I still had hope.
At the same time I wrote the Commerzbank that if they wanted to have the operative company as client they should continue with the process or reevaluate it as soon as possible, as I was about to open it with a different bank.
In my mind I was already convinced that it will not work anymore with the Commerzbank and the operative company was to get its account at another bank, hopefully.
Yet, a few days later I got some mail (not email, mail) with information about the FinTS/HBCI access, which I requested during the initial application. I was a bit surprised, as this was no confirmation or anything but just some access information for the bank account, apparently. At this point I was still a little skeptical. Yet, IIRC two days later, I got further information and access to the banking account of the operative company at the Commerzbank!
Long story short, I was happy that it finally worked out and that my hunch was (to some degree, it's not really certain) right!
So I can only recommend to check out the Bonitätsmanager app and confirm / correct some information of your Holding Company to make sure that there is a SCHUFA entry for it, before you start opening the bank account for the operative company right away.
Next steps
So far I already covered a few aspects which I discovered, learned and experienced:
- Introduction, watching videos and researching the holding structure
- Making the actual step of going to the public notary and signing the certificate of incorporation
- Virtual Office/Address and Terminology for the different kinds of addresses and locations for the various forms and documents
- Do I need to be present, physically, at the local trade licensing office to perform the trade registration, despite the form being available online?
- Creating an Opening Balance Sheet, Eröffnungsbilanz, from the bookkeeping software, correctly
- Does the Holding Company really need to calculate and submit (pay) the sales tax pre-registration, Umsatzsteuer-Voranmeldung (USt-VA) after every quarter, despite not doing a lot other than waiting (for years) for the returns of the operative company?
- (This article) Why won't the bank open a bank account for the Operative GmbH after opening one without problems for the Holding Company?
In the next post(s) I'll highlight the next steps, some of which I did not comprehend quickly in the - for me - necessary detail:
Disclaimer
The content provided in our articles is for informational purposes only and should not be construed as legal or tax advice. Readers are encouraged to seek professional advice from qualified professionals regarding their specific legal or tax situations.