[mherdeg]

I have read people say that a key difference in entrepreneurship in the US versus European countries is that European company founders are much more likely to be held responsible for their companies' debts and are therefore much less likely to experiment with new businesses at the rapid pace we see in the US.

Would that have been true here? If a German startup had raised $150k in venture capital and taken $250k in orders from consumers and shut down without sending any products to any customers, what would happen to the founder? Would he end up paying someone $250k--$400k out of pocket for a long time?

[JanSt]

(not a legal expert, no guarantees ;))

There are different forms of companies in Germany (GbR, UG, GmbH,...) some of which require personal liability and some which don't (to some degree). E.g. a GmbH is a limited-liability (at least 25k €). BUT the CEO has to act with diligence. Otherwise (e.g. acting with negligence) they are liable with all of their personal assets. In my non-expert eyes, the CEO of this company would be liable even under the shield of a GmbH.

[koonsolo]

At least in Belgium, you could still be charged by neglectance when your company goes bankrupt. I have no idea what that means in practice and how many are actually convicted.

This is to prevent doing irresponsible things without it being real fraud.

[briandear]

There's a Germany company, called Relocatly that took money from hundreds of people shipping household goods from Europe to the US -- they went insolvent, our goods were held in port by the actual shipping company and now we have to pay the shipping company despite having already paid Relocately.

They took money for shipments even after they already knew they were insolvent. Now our original payments are trapped inside the insolvency account and the managers of the company? No consequences at all even though they took money for a service they knew they wouldn't be able to provide.

Small anecdote, but the claim that "European company founders are much more likely to be held responsible for their companies' debt" is not true in my experience. If anyone is interested in reading some of the customer stories of Relocately: https://www.international-movers-reviews.com/company/relocat...

My point isn't to complain about that specific company, but to provide a counterexample that the idea that European corporate governance isn't necessarily "better" at all. They scam and fraud just as readily as anyone else.

[JanSt]

That's negligence and AFAIK as a GmbH the general managers/ceo are personally liable.

[smoe]

Don't know about Germany but in Switzerland the managers are not personally liable for the debts of a company.

Except the damage to the company/employees/clients can be be proven to be intentionally or negligently caused by a manager. For this, the they can be held liable with their entire private assets

[newfangle]

The founders of this company likely broke the law in the US