In March 2022, I (Janik) was at the notary in Frankfurt to establish our Not Today gUG (haftungsbeschränkt). Roughly three months later, it is official. We made it to the commercial register. But why is it essential for us to have a company, and why did we choose to go down the non-profit route?
Let’s start at the beginning. Once Danny and I set out to participate in the Talisker Atlantic Challenge, we began to read and learn about the supporting elements necessary to make the adventure a success. Preparing the mind and body is life-saving. But, we cannot start without the money and equipment recommended by the Atlantic Campaigns race organizers and fellow racers (teams of 2023).
Slowly grasping the monumental task we have gotten ourselves into, we realized that we need to think and plan bigger. After a brief calculation, we figured we want to raise 300.000 €. The first half is required to finance the race, and the second we dedicate to our charities.
Why we Founded a non-Profit Company
Knowing the ballpark of money we are talking about, we got pretty sure that we do not want to take all the risks with our private accounts and personal liability. We needed a legal instance, but which one?
The first question to solve is whether we wanted to be a non-profit or not. What are the benefits? First, you generate trust with the non-profit label. We ensure donors and sponsors that we use the money wisely, and the law requires us to reinvest all surpluses into the common good. Second, when following such reasons, the state allows significant taxation benefits. Donors get donation receipts allowing them to reduce their taxation directly. We also do not have to pay any taxes for the income of our non-profit business.
The second question was whether we should establish a club or a company. On Wikipedia, a club is “an association of people united by a common interest or goal.” In Germany, we have a vast club system. Primarily, a club’s foundation has many equally empowered members who elect their board. The board must report the projects and finances at least once a year to its members. It is democratic by heart. This was not reflecting our values 😀 Jokes aside, Danny and I were thinking about what additional value we have by forcing us into that structure.
However, we knew that we would be running the project as a team of two with a growing amount of helpers (Do you want to help us? We need you! Write us a message in the contact form). To save us from the bureaucracy, ease up the VAT taxation processes and be more flexible in general, we then decided to found a gUG or gemeinützige Unternehmensgesellschaft (yes, we love German). Founding non-profit limited liability companies has become modern with the rise of socio-ecological entrepreneurship.
It enables many of the benefits above of a club with a more economical infrastructure combining the best of both worlds for the organization and, in the best case, society. I Am Expat has an extensive article on the matter.
We love German Bureaucracy
What we underestimated was the effort necessary for doing that, though. While founding a club or a simple company is a one-week thing, we needed nearly three months to get fully registered.
It started with the bank account. Most of the new and innovative services are based on Solarisbank. They do not support non-profits yet. Talking to Commerzbank, they said that non-profits are not their priority since they do not generate profits. Serving the system, I guess. Before I heard that Qonto supports them, I already went with Postbank. This process alone has required us for nearly two months.
Next up was the statute of the company. Due to the non-profit regularities, our notary SKW Schwarz in Frankfurt had to fight to change the legal texts and some minor formal details at least twice with the registry court.
Last but not least, the tax office has to approve our non-profit status. Here we are joining forces with a long-term partner of mine regarding tax questions. TCS Treuhand is already handling my holding and other founding adventures.
Then, finally, it happened. Since 29th June 2022, we are registered at the Munich company register. What an effort!
A long way to go, still.
We are happy that the first steps have been taken. But, our legal and structural setup is not entirely done. TCS is supporting us in becoming clear when our packages are labeled as sponsoring and when as donations. And some other more complicated tax questions. When you always wanted to deep dive into non-profit taxes, shoot Nik Veldkamp a message.
As well, Postbank only offers credit cards to companies that exist longer than 12 months. Being international by heart with Danny in Indonesia, boats from the UK and myself in Germany, I doubt we can avoid getting one altogether. While Wise is especially great at international money transfers, the aforementioned Qonto or Moss promise easy accounting and credit cards.
Independent, now that we are registered, we can scale up our sponsoring efforts and sign our first deals. Are you interested or know somebody that could want to support us? Check out our Sponsoring page or shoot us a message.
