I don't fully understand the comment you've made. Why do you believe it to be bonkers or a scam to allow no-capital limited liability firms?
It effectively puts the entire country into a position where unless a citizen is born relatively wealthy, they have to perform labour for someone else for several years while they save up enough to start their own business. Who does the system benefit? What is it preventing? Why has the sky not fallen in on the UK with a near identical economy, but near-zero cost ltd company startup fees?
> It effectively puts the entire country into a position where unless a citizen is born relatively wealthy, they have to perform labour for someone else for several years while they save up enough to start their own business.
Yup that's pretty much the idea.
If you think that's unfair, oh boy, wait until you hear about our infamous trade schools and apprenticeships.
Though you're right, incorporation doesn't shield from scammers. We as a nation fell for Wirecard after all.
There are plenty of other forms of companies than LLC which people can use.
With an LLC, the company is only liable with the capital that it has, and if it has none, then it can scam people with impunity (there can be criminal charges if there's outright fraud, but you won't win any money in a civil case against a company that scammed you, if the company has no money).
Don't know how it works in the UK/Germany, but an LLC isn't a complete shield against liability. If you're scamming people or acting recklessly you could easily find your personal assets targeted by a judge.
I see, I think it's implied there that if you're not wealthy then forming a business while assuming all the liability of the business is an equally or larger moat to cross for the poor.
It means that as soon as you screw something up or just get unlucky you might not only lose your business, but your personal savings, house etc.
You're correct, this is the opinion I was trying to get across in my original comment about the inequity in the German system relating to limited liability firms.
It effectively puts the entire country into a position where unless a citizen is born relatively wealthy, they have to perform labour for someone else for several years while they save up enough to start their own business. Who does the system benefit? What is it preventing? Why has the sky not fallen in on the UK with a near identical economy, but near-zero cost ltd company startup fees?