We are changing Transloadit's legal entity from a British "Ltd" to a German "GmbH". Both are a type of Private Limited Liability Company, and you won't notice any changes on the operational side. Bank statements and tax numbers will change, however. If you have signed contracts with us, you may want to sign updated versions featuring our new name. Please reach out if that is the case.
Why we became a British company in the first place
When we started Transloadit ten years ago, Tim and Felix, our Berlin-based founders, already owned a consultancy company, called "Debuggable Ltd". It was an easy means for us to have some initial legal and financial structure in place: we had an accountant, bank accounts, the ability to send invoices, and so on. Thus, Transloadit actually started out as a product sold by Debuggable. It has been a long time since then, but the name can still be seen on some bank receipts.
Over the first few years, Transloadit grew and matured up to the point where we could finally start doing it full-time. We then wanted to give the company its own entity, in which I, as our Amsterdam-based founder, would also would hold an equal stake. Instead of going with a German (GmbH) or Dutch (BV) entity, we opted for a British Private Limited Company. The reasons were simple:
- It would shield our personal liability in the same way
- It would require a far lower initial investment (300 GBP vs. 25,000 EURO)
- Since we were aiming for an international market, we thought that an "Ltd" would be more familiar than a "GmbH" or a "BV"
And so, since 2012, we have officially been a British company, headquartered in Berlin, and syncing our books to the UK each year. We didn't have to worry about paying taxes in both the UK and Germany either, thanks to EU regulations in place to prevent that. In other words, it seemed like we had it all figured out.
Our brexit strategy
And then the whole brexit thing happened. While nothing about this has been certain the past few years, one thing we had not anticipated was the actual possibility of a "hard brexit", a.k.a. the "No Deal Leave". Whatever we may think of the UK wanting to leave the EU, a hard brexit poses a serious threat to the way we do business. If all EU agreements disappear, we will default to World Trade rules. This means that we as founders would become personally liable and, as we understand, it could also mean that taxes will have to be paid twice.
Hopefully, a hard brexit can still be avoided, but it is not looking very promising at the moment. So, with the current deadline of late March fast approaching, and no concrete solution in sight, we have decided to prepare for the worst-case outcome. It is possible things won't be as bad, but it seems wise to not take chances. So last week, Tim and I met in Berlin to create a German company. A Dutch company would have allowed us to ramp up hiring due to lower corporate taxes, but we discarded that option when we learned about 'goodwill tax', which effectively means that Germany would charge us a prohibitive amount of money, simply for leaving.
A new name (for now)
For reasons we still have trouble understanding, the new, German company could not be named Transloadit. It had to be different to a certain degree. 'Transloadit Cloud Services', for instance, was not approved. We were then informed that numbering would be the way to go if we wanted to preserve 'Transloadit'.
And that is why, for the time being, our official entity is going to be 'Transloadit II GmbH'. It's not pretty, but it will keep us afloat. Luckily, we will be able to disolve the Ltd in good time, and then become 'Transloadit GmbH' at a later stage.
All preparations are now fully underway and we should have the whole process concluded before March 29, which, as of writing this, is the current brexit deadline.
Will anything change for me?
No. Other than the new official name, nothing in our service will change. We intend to keep the impact for our customers as limited as perhaps seeing a different name on bank statements. If you have signed contracts with us, however, you may want to sign updated versions featuring 'Transloadit II GmbH'. Please reach out to us if that is the case, or if you have any other questions or concerns.