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Pawnbroking - Apply for a permit


The pawnbroker grants a cash loan against the deposit of a pledge to secure the loan together with interest and costs of business operations.

The pawnbroker arranges pawn transactions by granting an advance on pledges handed over to him/her and pledging the pledges in his/her name with a pawnbroker.

Anyone wishing to conduct the business of a pawnbroker or a pawnbroker requires the permission of the competent authority. The permit may be subject to conditions insofar as this is necessary for the protection of the general public or the pledgers.

In the case of partnerships (e.g. OHG, KG), the trader is any managing partner. In the case of legal entities (e.g. GmbH, AG), the permission of the legal entity is granted.

Process flow

You must apply for permission to operate a business as a pawnbroker or pawnbroker from the competent authority.

After the exam, you will receive either permission or a rejection notice. A permit may be subject to certain conditions.

Competent authority

In Lower Saxony, the districts, independent cities, large independent cities and independent municipalities are responsible.

Requirements

If you want to work as a pawnbroker, you must provide special security and proof.

  • You must provide proof of necessary funds or collateral for the first six months. These can be balances or a bank guarantee.
  • You must also take out insurance against fire damage, water damage, burglary and robbery and present it when you apply. A safe must be available for jewelry.
  • You must secure your premises against burglary by means of an alarm system.
  • In the case of car pawn shops, the question of the possible environmental hazards caused by the parking areas of the vehicles must be clarified.

Permission will be refused if:

  • Facts justify the assumption that the applicant does not possess the reliability required for the business to be carried out. As a rule, a person who has been sentenced to imprisonment for a crime, theft, embezzlement, extortion, fraud, breach of trust, forgery of documents, receiving stolen goods, usury or for an offence against the law against unfair competition in the last five years prior to the filing of the application does not possess this reliability.
  • The applicant fails to provide evidence of the funds required for the business or the corresponding collateral.

Which documents are required?

  • Identity card or comparable identification document (copy)
  • Non-EU citizens: residence permit (copy)
  • Proof of entrepreneurial legal form
    • Company headquarters in Germany:
      • in the case of registered companies: excerpt from the commercial register and, if applicable, a copy of the articles of association (e.g. in the case of a partnership under civil law (GbR))
    • Registered office abroad: Documents from this country proving the legal form.
  • Proof of personal reliability
    • Residence in Germany:
      • Certificate of good conduct
      • Excerpt from the Central Trade Register for natural and, if applicable, legal persons
    • Residence abroad: documents from your home country proving that you have the personal reliability to perform the requested service
    • On a case-by-case basis, the authority may request further documents that are suitable to make a statement about your personal reliability as an applicant.
  • Proof of funds and collateral required for operation
    • Residence in Germany:
      • Excerpt from the list of debtors
      • Information from the insolvency register
    • Residence abroad: documents from your home country as proof that you have the necessary funds and collateral
  • Social
  • Floor plan of the premises intended for commercial operation

What are the fees?

The fee can be up to €230 in Lower Saxony

What deadlines do I have to pay attention to?

You must apply for the permit before starting the activity. Only after the permit has been granted are you entitled to practice the trade.

Appeal

In Lower Saxony, a preliminary procedure is not provided for by § 80 of the Lower Saxony Justice Act. Therefore, no objection is admissible, but rather an administrative court action must be brought directly.

What else should I know?

At the start of the business, the pawnbroker must notify the competent authority of the premises he or she uses for the business; furthermore, he/she must immediately notify the company of any change in the premises used for the business.

The pawnbroker is obliged to keep accounts.

Technically approved by

Bavarian State Ministry of Economic Affairs, Regional Development and Energy

;

Lower Saxony Ministry of Economic Affairs, Labour, Transport and Digitalisation

Author

The text was automatically translated based on the German content.

Source: Serviceportal Niedersachsen (Portalverbund des Bundes und der Länder)