Due to globalization and high demand for numerous products and services, many companies are setting up additional offices in order to be able to offer their goods and services over as large an area as possible. Every company automatically has a main branch. Otherwise, any number of branches are possible. These can be set up in the same city, another city, or even abroad. But can you set up a branch just like that? Does a branch have to be registered? If so, what should you bear in mind? Specialist lawyer for commercial and corporate law I would like to answer these questions for you.
branch office as a branch
From a legal perspective, a company's branch is treated as a permanent establishment. This type of branch is characterized primarily by the fact that it is dependent on the main branch in many ways. Therefore, it neither has its own accounting records nor is it allowed to enter into contracts independently. The delivery of goods is usually also handled by the main company. For these reasons, branches often do not have their own managing director. Due to the dependency, a business registration or entry in the commercial register is not required. Rather, a branch is a spatial separation from the main company.
branch as an independent branch
The situation is different with an independent branch. From an economic point of view, this is independent, although it is part of a company. The difference to a subsidiary is that an independent branch is not a separate legal entity. Business registration and entry in the commercial register are still mandatory due to self-employment. The independent branch carries out similar or the same business as the main branch. In contrast to a branch, an independent branch must have its own manager who has a power of attorney or power of attorney. Since these branches operate independently, they have separate accounting and their own payroll for employees and can conclude contracts without agreements.
Data for registering an independent branch
When registering the new, independent branch with the commercial register, the following data must be provided:
– Name of the main branch
– Location and object of the branch
– Business address
– Number of conductors
– Data on the managing director/representative
– Data of the domestic receiving authorization (for branches abroad)
In addition, the following copies, each in public and certified form, must be included with the business registration:
– Foreign commercial register extract (only if registered abroad)
– Social contract
– Shareholder resolutions
Conclusion on the branch
If a company wants to set up a branch, it must be clear whether it is to be a dependent branch or an independent branch that has its own accounting and is allowed to conclude contracts. In the latter case, a business registration and entry in the commercial register is necessary. Here, certain data about the location of the branch and its manager must be provided. Certified copies of the partnership agreement and shareholder resolutions must also not be missing.
If you have any further questions about branch offices and would like to receive personal advice, I would be pleased to welcome you in my law firm specializing in commercial and corporate law If you are interested in further topics relating to commercial and corporate law, please read my blog.
