[davedx]

> The standard way to reduce liability risk is to get liability insurance

Exactly! That's what I do in the Netherlands. It's also common to cover this contractually too - you can negotiate where liability falls for many cases.

Getting a limited liability company for a one-person operation is just overkill.

[t0mas88]

The Netherlands changed the rules 14 years ago to allow a BV (equivalent to a German GmbH or US LLC) with zero starting capital. If suppliers want to check company capital, the data is public with the companies register (KvK for locals).

There are two reasons not to go this way in NL, 1. There are tax discounts for small businesses that only apply to a sole proprietorship kind of structure and 2. Administrative costs for a BV are slightly higher because the legal entity itself needs to file taxes, instead of only the owners having to do so.

But the difference is now very small, #1 has been reduced the past few years and #2 is quite simple. It's an online portal to submit the numbers, if you know what you're doing you don't need an accountant.

And I think this is the key criticism for the German system. They don't seem to have a simple online portal for this and they still require 25k starting capital. That makes it harder for a small business to get started.