Hacker News Reader

Comment by nradov | Hacker News Reader

If a company collapses while having more liabilities than assets then that's fine. No one is being forced to extend any credit to them.

View on HN

It will make it harder for "worthy" companies to get loans and credit.

Is that why it's so hard to get capital, credit, loans, and investment in the USA?

Nah. Lenders are free to do whatever credit checks they like. Government doesn't need to get involved.

That's the American viewpoint, right of the strongest, sue if they wronged you. European systems typically have a different philosophy where the counterparties are more protected.

It's expressed in stronger consumer protection laws, but also these German things where you can't start a GmbH/LLC with zero capital and wish the counterparties good luck suing you if you never pay them.

You're missing the point. Strong or weak has nothing to do with it. If you want to be protected then don't do business with undercapitalized counterparties. Everyone can make their own decision on acceptable level of financial risk. It's stupid for governments to dictate this.

How do you know if your counterpart is undercapitalized, though?

You're welcome to ask them for whatever evidence you like before agreeing to do business.

Look up the business registry, debt registry etc., it should be all there, at least it is in our country.

So the OP can create a UG with €1 capitalization.

They can be cheerfully undercapitalized and counterparties, seeing that it's an undercapitalized UG rather than a GmbH, can make their own decision on financial risk.

> And the cheap door has a price of its own: to some clients, “UG” reads as “not serious,” and they would rather deal with a GmbH.

...turns out the OP doesn't like that.

Reply on news.ycombinator.com