ApS Danish limited liability company guide for entrepreneurs

Basic information about the Danish limited liability company (ApS)

Features of an ApS company

In Denmark, the limited liability company, also known as ApS (Anpartsselskabe), is one of the most commonly chosen legal forms. It is a type of company characterized by flexibility and the benefits of limited liability, which attracts both investor groups and independent entrepreneurs.

ApS is distinguished by its flexible ownership structure, which allows shares for a different number of owners, both individuals and business entities. A distinctive feature of this company is its status as an independent legal entity, which means that it has a legal capacity that is completely separate from its owners. A key aspect of this legal form is the limited liability of the owners, which is an important protective barrier to their private assets. In the event of any liabilities and claims, the financial liability of the owners is limited only to the capital they have previously invested in the company. This guarantee of financial security makes the limited liability company a particularly attractive legal form. The Danish ApS shelf minimizes the owners' personal risk and allows them to focus on business development.

The entire process of registering a limited liability company (ApS) begins with the requirement to pay the share capital, which at a minimum should be DKK 20,000. This sum constitutes both financial security and the company's basic capital. An ApS company must keep complete accounting records, including recording all financial and operational transactions, and submit regular digital annual reports. These activities promote transparency in the company's operations and make it easier for Danish regulators and stakeholders to understand its actual financial health. The cost of registering an ApS company in Denmark is DKK 670, which includes all paperwork. Despite some registration expenses, the process is relatively straightforward and allows the business to get off the ground quickly.

Under current company law, a Danish limited liability company (ApS) is required to maintain a detailed register, which must cover various aspects of its structure and operations. A key element of this register is the maintenance of an ownership ledger, accurately documenting the holdings of all shareholders in a given company. This provides transparency in the ownership structure, enabling effective management and supervision of capital. In addition, the ApS must record information on mortgages, including any financial collateral on its assets. This area of the register provides important data for assessing the company's financial stability and creditworthiness. Another very important aspect is the registration of all legal and beneficial ownership relationships, including documentation of agreements, contracts and other legal obligations affecting the company's assets and operations. The requirement to have a board of directors is another important element under the law. The board of directors is responsible for overseeing the day-to-day affairs of the company, and its composition can be flexibly adjusted according to the needs and nature of the company's business.

The Danish limited liability company not only enables entrepreneurs to manage efficiently, but also fosters dynamic growth in the Danish market. Its key advantage is its ability to harmoniously combine entrepreneurial flexibility with financial protection for owners. For many entrepreneurs, ApS is an attractive option for minimizing personal risk while effectively responding to ever-changing market conditions.

Benefits of owning a limited liability company (ApS)

Choosing a limited liability company (ApS) as a target form of doing one's own business has numerous benefits. One of the biggest advantages is, first of all, limited liability, which is an important safeguard for the company owner. This means that in the event of any financial problems or liabilities of the company, the personal assets of the owner of the Danish company are not at risk in any way, and liability is limited only to the amount invested as share capital, usually not exceeding DKK 20,000 in the case of ApS. This state of affairs provides the entrepreneur with financial security and peace of mind.

In addition, ApS offers a flexible management structure, which enables efficient coordination between co-owners and shareholders. If necessary, it is possible to easily involve new partners in the company or sell its shares, which promotes the dynamic development of the enterprise and rapid adaptation to constantly changing market conditions.

With the establishment of ApS, the enterprise also acquires the status of an independent legal entity, which can bring significant tax advantages and facilitate settlements with financial institutions and authorities. In addition, the flexible structure of an ApS company provides the opportunity to create a variety of business models, for example, a holding company with an equity entity, which further supports effective management and development strategy.

The high visibility of limited liability companies also contributes to the fact that they are very well known among business partners, which further builds trust and makes it easier to establish business relationships. As a result, owning an ApS company can also improve the raising of capital for the company's development, as investors and financial institutions often prefer this legal form over others due to such features as its stability and transparency. It is because of this that choosing an ApS company as a legal structure can give an entrepreneur a number of advantages and support the development of his business.

Comparison of the ApS company with other legal forms in Denmark

You can distinguish between several different ways of legal organization for companies that apply in Denmark. One popular option is the ApS limited liability company (Anpartsselskab). In addition to this, you may also encounter other forms, such as the joint-stock company (A/S), the limited liability company (IVS), the limited liability partnership (K/S) and the single-member limited liability company (E/ApS).

The most important differences that exist between the various legal forms in Denmark and the limited liability company (ApS):

• The registration process and associated costs: Registration procedures differ depending on the legal form. The registration of an ApS company is less complex and less expensive compared to the registration of a public limited company.
• Minimum initial capital: For an ApS company, the minimum amount is DKK 20,000, while for a joint stock company (A/S) it is DKK 400,000.
• Control and management: Shareholders' shares in an A/S company are usually easier to sell than shares in an ApS company, which can affect the ownership structure.
• Number of shareholders: An ApS company can be established by at least one shareholder, unlike a joint-stock company, which requires at least three shareholders. A single-member E/ApS company, as its name implies, can have only one owner.
• Financial and capital resources: A joint-stock company usually has more opportunities to raise capital by issuing shares on the stock market, which can be more difficult for an E/ApS company.

When choosing the right legal and organizational form for a business, special attention should be paid to its individual needs, business plans and the preferences of the business owner. It is always advisable to consult a professional or lawyer before making a final decision. However, it is worth noting that the ApS company is popular among entrepreneurs setting up businesses in Denmark.

The process of establishing a Danish limited liability company (ApS)

Establishing an ApS company step by step

The standard process for establishing a limited liability company (ApS) in Denmark includes the following steps:

1. Preparation of incorporation documents and Articles of Incorporation.
2. Signing by the founders of the incorporation documents and articles of association. It is possible to do this with an electronic signature.
3. Receipt by the founders of documentation for payment of share capital, which must be a minimum of DKK 20,000. This can easily be done through a Danish client account of the founders' chosen lawyer.
4. The process of registering a company on the virk.dk platform involves entering all the necessary data about the company and attaching the founders' documents, articles of incorporation and capital documentation. In addition, a fee of DKK 670 is required to be paid to the Danish Business Authority. It is important that the incorporation document be added to the Enterprise Authority's computer system within two weeks of signing it, as otherwise registration will not be possible.
5. After successful registration, owners receive an official ApS company registration confirmation from the Danish Enterprise Authority, which includes a company identification number (CVR).
6. The next step is to create an owner's ledger.
7. The company's owners then contact their bank to open a business bank account. They will need such details about the company as the CVR number, the owner's ledger and the ID card of at least one of the owners. Usually the bank will also expect to see the company's business plan.
8. Once the company's owners have received information about the new company account, it is possible to transfer the company's capital to the newly created bank account.

Requirements for ApS company founders

The conditions for founders of a Danish ApS company vary. It all depends on whether the founding entity is a legal entity or an individual. In the case of individuals who aspire to be ApS founders, the basic criteria to be met are that they must be of legal age, that is, at least 18 years old. In addition to this, founders of a Danish ApS company must not be under legal guardianship or incapacitated in any respect. It is also important that they are not in the process of restructuring or bankruptcy in another company.

For legal entities, there are different criteria. First, the company must be legally capable, which means that it must not establish any other companies during the incorporation process. In addition, it must not be in the process of restructuring, bankruptcy or forced liquidation. In addition to this, the company must also have the ability to acquire rights, participate in legal proceedings and undertake various types of obligations.

It should be noted that a legal entity that is currently undergoing voluntary liquidation still has the option to establish a new ApS company. However, it should be borne in mind that a sole proprietorship cannot be converted into a limited liability company. This restriction is due to the fact that a sole proprietorship is not considered a legal entity under Danish law.

Articles of Association of a Danish limited liability company (ApS)

This is the key document for a limited liability company (ApS), which sets the framework for its operations. It consists of a set of rules and norms that govern the operation of the company. Although the Articles of Association of an ApS in most cases take a standard form, the company's founders have the option of introducing personalized arrangements that apply only to a particular company. However, it is important that these provisions are closely related to and relevant to the actual operations of the company.

The Articles of Incorporation constitute a commitment to all owners of the company, while being subject to public disclosure.

The basic criteria as to the content of the statute include:

• the name and, if any, additional names of the company,
• the purpose of the company's business,
• the amount of share capital, which must be a minimum of 20,000 kroner,
• the number of capital shares or their nominal value (unit value),
• the management structure of the company in question, including information on the board of directors or management,
• procedures for convening the company's shareholders' meeting,
• the company's accounting period.

It is also worth considering whether other relevant issues should be included in the Articles of Association, such as those governing the company's representation.

Share capital when registering an ApS

When planning to establish a Danish limited liability company (ApS), an important step is to pay the share capital of DKK 20,000. There are several ways to pay this deposit. One is to transfer your assets to the company, which includes assets such as a company car or equipment used for the business. In addition to this, there is also the possibility of converting the value of an already existing business into an ApS. For example, if an entrepreneur has a sole proprietorship, it is possible to turn it into an ApS limited liability company, and the value of this business will be included in the start-up capital of the newly formed company. This type of business transformation usually requires professional accounting support to help prepare the required declarations relating to the value of the transferred business.

If a business owner decides to use assets as start-up capital, it will be necessary to use an accountant to assess the actual value of the assets in question. For example, if a special camera worth DKK 25,000 is in possession, it is possible to invest it in the company's capital. In such a situation, only the remaining DKK 15,000 remains to be paid in share capital. However, it should be borne in mind that the assets that are brought into the company must be relevant to the company's operations, as their private use could have serious tax consequences. This is why it is so important to consult a financial expert or lawyer before making such a decision, in order to ascertain all aspects and consequences of such a move.

Incorporation document of a Danish ApS company

To register a Danish limited liability company (ApS), a founding document is required. To formally confirm the formation of the company, the founders of the company must affix their signatures to the incorporation document. Its content may include various types of provisions, both mandatory and optional.

Mandatory elements of the content of the founding document of a Danish limited liability company include:

• Founders: it is necessary to provide the name, surname, address and identification number, if any, of the founders. Individuals should be listed by name, and for legal entities it is necessary to provide the company name, identification number and address.

• Issue rate: the specified rate that must be paid when purchasing new shares in a particular ApS company. This rate is used, for example, when increasing the company's share capital.

• Accounting start date: The date on which the company began keeping its accounting books, which marks the actual beginning of the fiscal year for the company in question.

• Date of commencement of operations: The moment from which the company has its own legal capacity. In case it is not specified, the legal capacity of the company occurs exactly after the founders sign the company's incorporation document.

• Deadlines: Indicate at what point it is necessary to take up shares in the company and when payments must be made.

Additional elements that may be included in a limited liability company's incorporation document:

• Special rights or additional benefits: It is possible to establish special rights or benefits for interested parties. Most often such benefits are established for the founders of the company.

• Contributions: In a situation where the company is not formed solely on the basis of cash contributions, it is necessary to include this in this section. Contributions of movable or immovable property, for example, can be an in-kind contribution.

• Audit exclusion: The owners of an ApS company may decide to waive the company's audit, but it should be borne in mind that this applies only to companies below a certain size.

• Contracts: Determine whether there are any agreements with the founders or other interested parties that may impose certain financial burdens on the company.

It is worth bearing in mind that the above points are only a few suggestions for optional content, so they do not constitute a complete list of possible additional entries. It is up to the founders of a given ApS company to decide whether the optional elements that are important to them will be included in the actual incorporation document.

NemKonto of the Danish company ApS

In Denmark, there is a special bank account, known as NemKonto, for receiving payments from public institutions, such as various types of benefits or tax refunds. Once you have a CVR number for your company, ask your bank to assign NemKonto to that number. You can choose an existing account or open a new one, here the choice is up to the owners of the company. Nevertheless, assigning a NemKonto to the company's ApS account is a must. This is an integral part of the Danish public banking system, designed to facilitate the flow of funds from public institutions to companies.

There are numerous benefits to using NemKonto. All Danish public institutions use NemKonto of companies to transfer funds, making it an extremely convenient and practical tool. By simply providing the company's account information to the bank once, all institutions can make payments to the company's NemKonto This in turn reduces the number of erroneous transfers, which benefits both parties. In addition, using NemKont saves public institutions time and money, as it reduces the need to update data.

Companies also have the option of making payments themselves using NemKonto. For example, they can use the option to transfer funds to other companies' NemKonto accounts or pay salaries to the private NemKonto accounts of employees employed by the company. To take advantage of these and many other features, it is necessary to first link the company as a private payer to a NemKonto account.

Costs of establishing an ApS

Establishing a limited liability company (ApS) in Denmark involves certain expenses. The first step is to pay a fee of DKK 670 to the Danish Business Authority. In addition, to register an ApS company, it is necessary to contribute initial capital of at least DKK 20,000.

There are also certain factors that can contribute to a significant increase in the costs associated with the ApS company registration process, even by several thousand crowns. A key factor here is how founders choose to register the company. There is the option of setting up a Danish limited liability company on your own, which gives you the opportunity to save money. There is also the option of registering an ApS company online, which eliminates the need to leave home and saves time as well. Alternatively, it is also possible to enlist the help of a lawyer or professional accountant, but this type of service usually involves an expense of 1,500 kroner or more. The more owners there are in a company, the more complex the shareholders' agreement becomes, which of course also translates into an increase in the cost of drafting the agreement. The services of an accountant or lawyer will also be more expensive in cases where the initial capital contributed by the founders is not in the form of cash.

An important aspect in the process of registering a Danish ApS company is to confirm the contribution of initial capital. In this situation, the use of a lawyer or accountant is a must. It is also necessary to take into account the possibility of unforeseen situations, which may also require the use of specialists. For this reason, it is recommended to prepare additional funds with which to cover additional costs.

ApS company registration as a citizen of another country

In Denmark, it is possible to establish a limited liability company (ApS) by citizens of other countries. The condition is that certain criteria are met. In addition, those without Danish citizenship can conduct their own business in Denmark without major restrictions.

To begin with, it should be noted that the key factor is the nature of the planned activity. Individuals without a Danish personal number (CPR) are limited in their ability to establish limited liability companies, such as a limited liability company (ApS) or a joint stock company (A/S). In contrast, individuals with a CPR can also start a business as a sole proprietorship.

The next important issue is the need to register a business address in Denmark. This is indispensable for legally registering the company and conducting business. It is irrelevant which country the business owner resides in most of the time - he can live both in Denmark and elsewhere.

The ApS company registration procedure involves submitting the required documents via Virk.dk, an online platform for registering businesses in Denmark. The prospective entrepreneur is required to submit a copy of his passport to the system to identify his identity. In addition, it is necessary to provide his own residential address and identification number from his country of origin. If the business owner is another company, it is necessary to provide a registration certificate, which must be in Danish or English to facilitate the verification process.

Denmark welcomes international entrepreneurs with open arms, offering attractive conditions conducive to the development of new ventures. Nonetheless, it is advisable to become thoroughly familiar with Danish regulations and, if necessary, seek professional advice to ensure that a newly established business complies with Danish regulations before starting specific activities.

Legal and documentation aspects related to ApS

Register of owners of a Danish ApS company

The register of owners is a documentation containing a list of persons who have shares in a given limited liability company (ApS). It contains information on voting rights and classes of share capital.

The following information must be included in the register of owners:

• shares held in the capital by each owner,
• the name of the owner of the shares and the mortgage, if any, the place of residence and CVR number, if the owner is a company,
• the date of acquisition of the shares and the date of pledge, if the shares are secured,
• the size of the equity shares held,
• voting rights of the shares held by the shareholder.

Under current regulations, the company is required to maintain an up-to-date register of owners. Owners of shares and persons securing mortgages are required to notify the company of any changes in ownership or security within two weeks of such modification.

Although there is no official requirement to include information about all previous owners in the register of owners, in practice this approach is recommended for both the company and its shareholders.

It is not necessary to physically maintain the register of owners, so it is advisable to opt for storing it electronically, such as as a Word or PDF document, which is much easier. It is worth remembering, however, that in limited liability companies the register of owners should be available to all holders of equity interests in the company in question.

ApS company and independent legal entity status

A limited liability company in Denmark, known as anpartsselskab (ApS), is considered a separate legal entity. This means that an ApS company has full legal capacity to act on its own behalf, including the ability to acquire rights and incur obligations, analogous to individuals.

An important advantage of this legal structure is that the company can conduct transactions, enter into contracts and hold assets independently of its owners. This separates the shareholders' personal finances from those of the company, limiting their personal liability for the company's debts and obligations to the amount of contributed capital.

In addition, using a structure such as ApS can bring major tax advantages. For example, the lower taxation of corporate income compared to the taxation of individual income can provide an opportunity to save some money. In other words, activities such as purchases, investments or other financial operations can be more tax-efficient if carried out by a company rather than by an individual.

ApS's status as a separate legal entity allows for more effective tax planning and reduced costs associated with its operations. ApS can employ a variety of accounting and tax strategies to maximize profits while minimizing the tax burden.

Choosing the right name for ApS

When naming a newly formed ApS company, there are several important requirements to take into account. First, the legal form of the company must always be visible in the main name. This is important for potential business partners, who can thus recognize that the company is a legal entity with limited liability. In addition, the company name must be clearly distinguishable from the names of other companies already registered with the Central Company Registration (CVR). The name of a newly formed company must not be identical or too similar to existing company names to avoid possible confusion in identifying them.

Moreover, when choosing a suitable name for the company, it is important to avoid using other people's names, trademarks, commercial features or other legally protected intellectual marks. The chosen name for an ApS company must also not be intentionally misleading. This means that the company's name should clearly reflect its actual activities and nature, in order to avoid misunderstandings or misconceptions in customers or business partners.

In addition to the main name, companies can also have additional names - one or more, depending on preference. These are particularly useful when different brands are developed within a single company. Both the main name and additional company names should be included in the company's Articles of Incorporation and registered to be visible in the Central Company Registration (CVR).

A limited liability company is required to use its main name in various aspects of its operations, such as, for example, correspondence, business documents and electronic communications. This is to ensure consistency and unambiguity in communications with the business community. When a company has a website, in addition to the main name, information such as the company's registered office and Central Company Registration (CVR) identification number must also be visible on the website. Providing these details on the site is necessary so that both customers and business partners can easily identify the company.

If there is a significant change in the main business, the company cannot continue to use the old company name unchanged if it is related to a specific business. It is necessary to update the company name so that it is not misleading.

CVR for a Danish ApS company

During the process of registering a Danish limited liability company (ApS), the company is assigned a special identifier - the CVR number. It consists of eight digits and is used to recognize a specific company. It can be said that it performs an equivalent function to that of a personal CPR number for individuals. It is very important for the operation of a company, as it makes it much easier to identify a company during various business and administrative procedures. In addition, it is necessary to have a CVR number to be able to create a NemKont for the ApS company to receive payments from state authorities. It is also used for registration in the MitID system, which in turn allows access to Digital Mail for Companies, facilitating correspondence and administrative matters online. Having a CVR number is essential for the proper operation of a company and for meeting the requirements of Danish law and administrative regulations.

The time it takes to obtain a CVR number depends mainly on the legal form of the company being registered. For a limited liability company, on average it takes from 1 to 4 business days. It is crucial to properly complete the registration documents to avoid possible rejection and the need to resubmit the application. It is advisable to use the services of a lawyer specializing in the establishment of Danish limited liability companies, which allows you to be sure that all formalities will be carried out in accordance with the applicable law, thus speeding up the process of obtaining a CVR number.

Subscription of shares in an ApS company

Capital subscription in a Danish limited liability company (ApS) involves a commitment to invest or acquire shares in a particular company. The subscription process involves a formal application for participation in the company's share capital and must be properly documented. The person who decides to subscribe to the capitals of a given company must be explicitly mentioned in the company's incorporation documentation, its register of owners or subscription lists, in accordance with the applicable provisions of the Companies Act.

For example, the owner of the company may invite two other persons to subscribe for shares in the ApS company, offering each of them an equal third of the shares. Under the circumstances, the company owner is required to introduce the company and discuss the company's bylaws with these individuals. Then the persons invited by the owner can choose whether they want to join the list of subscribers. Their agreement to be on the list determines their status as holders of shares in the company, which the company owner can accept or reject.

Share subscription plays an important role, being a key decision-making process for managers of a limited liability company. As a result of properly defining the details of capital subscription, the company's management can effectively control the ownership structure while ensuring adequate diversification and financial stability for the business. In addition to this, the subscriber's decision to participate in a particular company carries significant financial and legal obligations that can have long-term consequences for his position in the company. For this reason, the entire capital subscription process in an ApS company should be carefully thought out in advance and regulated in a transparent manner and in accordance with current legal regulations.

Administrative issues concerning the ApS limited liability company

There are a number of formal requirements and regulations that must be respected for the Limited Liability Company (ApS) as a legal form for a business. These are established on the basis of the regulations governing Danish companies, which define the operation and various aspects of this type of business. This is due to the need to comply with ApS regulations.

In the process of establishing a Danish ApS company, it is necessary to prepare a founding document that contains key information about the company to be registered, such as the name, location, initial capital and data about the founders. It is also important to remember that it is necessary to prepare the company's articles of incorporation, which regulate in detail the company's rules of operation, including the structure of the governing bodies, the process of making key decisions and other important aspects of business operations.

Limited liability companies in Denmark are required to have a company account, which is necessary for business-related financial transactions. In addition to this, according to current regulations, entrepreneurs setting up such a company must acquire mandatory insurance against accidents at work. If the company has no employees, this insurance is still required, according to current legislation.

Company law regulations impose a number of restrictions and requirements on the operation of Danish companies. They touch on a number of important aspects, affecting the management and operations of limited liability companies. One of the most important points is the timing of general meetings, which are the bodies that make key decisions about the company's operations, such as deciding on the election of the board of directors or the distribution of profits.

In addition, regulations on limited liability companies strictly define the procedures and criteria for any changes made to the company's share capital, which includes, among other things, increasing or decreasing the capital, issuing new shares, and carrying out demergers or mergers. Such a detailed legal framework serves to ensure the proper functioning and transparency in the operations of limited liability companies, protecting the interests of both owners and contractors and other stakeholders.

Necessary documentation for a Danish ApS company

During the process of establishing a Danish limited liability company (ApS), it is important to make sure you have all the necessary documents. According to company law, a company incorporation document must be prepared, which contains detailed information about the founders, such as names, surnames, residential addresses and VAT identification numbers, if any. The document must also detail the prices of the shares, the dates for their subscription and payment, the date on which the company will begin operations, and other relevant aspects. In addition, provisions must be included regarding any special rights for the founders and agreements made with them or other parties that may affect the company's financial position.

The persons who establish a company, known as founders, are responsible for signing the incorporation document. They are not required to contribute share capital and can be either individuals or legal entities, such as other companies or corporations. This provides flexibility in the process of registering a new business, giving the opportunity to introduce different configurations and ownership structures that best suit the needs of the company's founders.

In addition to this, it is necessary to prepare a company's Articles of Incorporation and maintain a book of shares. A company's Articles of Incorporation is a set of rules and regulations governing the activities of a particular company, defining its objectives, organizational structure, decision-making procedures and the rights and obligations of its members. The share book, on the other hand, is the company's documentation that accurately identifies the owners of the company's shares and their value. The share ledger is a key tool for managing and overseeing the company's ownership structure, allowing monitoring of the shares of individual investors and any changes in their ownership. Although the company's share ledger is not made available to the public, it must always be available to regulators in case they wish to inspect it.

Once the Articles of Incorporation are approved and the incorporation document is signed, the company should be registered by the owners with the Commercial Office within two weeks of signing the official incorporation document. To do this, it is necessary to provide the relevant documents and applications and pay the relevant registration fees. However, registration with the Trade Authority does not mean automatic registration with the VAT register. The process of registering with the Trade Office mainly serves to formally establish and register the company as a business entity, while registration with the VAT register is a separate procedure.

Financial aspects of ApS

Liability of ApS company owners

The advantage of ApS, a Danish limited liability company, lies in the financial protection for the owners. They do not have to worry about personal liability for the company's debts, as their personal assets are safe regardless of the company's financial situation. This important safeguard is convincing many entrepreneurs of this form of business.

In ApS, owners are only liable up to the amount of their contribution. This means that the financial risk is limited to the possible loss of the money invested in the company. To put it another way, each shareholder is liable only for what he himself has contributed to the company.

A limited liability company is a separate legal entity, which implies that it has autonomous rights and obligations. If the company has assets, they are responsible for all financial obligations of the company. Therefore, for many owners, a favorable approach is to own ApS shares through a holding company. By transferring some or all of the profits to the holding company, profits can be protected from the risks associated with potential financial problems of the operating company.

With this approach, shareholders of limited liability companies can not only protect their private assets, but also maintain flexibility in managing their finances and profits.

Taxation of income in an ApS company

An important issue in the operation of limited liability companies is the question of taxation. All such companies, including ApS limited liability companies, are required to pay tax on the profits generated in the form of corporate income tax. The rate of this tax for limited liability companies is 22% of profit.

Corporate income tax is characterized by much lower rates compared to taxes that are imposed on individuals. It is charged only on the profit made, so taxation applies only if the company earns income.

Thanks to the legal form of an ApS company, it is possible to deduct a variety of expenses from taxable income, which is a significant advantage for entrepreneurs. This allows the company to effectively manage its finances by reducing the income that is subject to taxation. Among the expenses that can be included in the deduction are depreciation, losses from previous years and investments.

In some cases, companies can avoid having to pay corporate income tax. This situation can occur when a company's income is low or when there are certain factors that significantly reduce the profit of the business, such as losses from previous years or investments aimed at the long-term development of the company.

Paying VAT in a Danish ApS company

Limited liability companies (ApS) in Denmark are required to register for VAT when they exceed a certain turnover threshold of DKK 50,000 in the following 12 months. Once this threshold is reached, the ApS company must register with the tax office to be taxed for VAT. The entire process of registering a company as a VAT payer involves providing the required documents and information confirming the company's status and details related to the operation of the business. Once the company is properly registered as a VAT payer, it is obliged to collect and remit VAT from customers and settle accounts with the tax authority on a regular basis.

There are different VAT rates in Denmark's tax system, each with its own application to specific situations. The basic VAT rate is 25% and covers most products and services. We can also distinguish reduced rates, such as 12% or even 0%, which apply to specific categories of goods and services. A reduced VAT rate of 12% is most commonly used for foodstuffs, medicines, medical services and hotel accommodation. Some products, such as books, newspapers, magazines or tickets to cultural events, may be subject to a VAT rate reduced to 0%. It is the specifics of the company's business that determines which specific VAT rate will apply to it.

A limited liability company (ApS) must regularly issue VAT invoices, which are important both for bookkeeping and for meeting tax requirements. VAT invoices that are issued by an ApS company must contain a variety of information to be considered comprehensive and in compliance with current regulations. Among the most important elements of a VAT invoice is the company's VAT identification number, which uniquely identifies it as a VAT taxable entity in Denmark. In addition, the customer's details, such as the customer's name or business name, registered or residential address, and its VAT identification number, if it is a VAT taxpayer, must also appear on the VAT invoice. The VAT invoice to be issued should also contain details of the transaction carried out, including the date of the invoice, a unique invoice number, a description of the goods sold or services provided, their quantity, unit price and the total amount of the transaction. In addition, the invoice must accurately state the amount of VAT that was charged on the transaction carried out.

In certain situations, an ApS company may be exempt from paying VAT or may be able to take tax deductions. One example in which an ApS company may be officially exempt from paying VAT is when it conducts activities that include the provision of educational or medical services. In addition, an ApS company may qualify for various tax deductions that significantly reduce its tax burden. For example, if the company purchases materials or services for taxable activities, it can take advantage of the VAT deduction on these purchases. When conducting international transactions, a Danish ApS company may also be subject to special VAT rules.

It's worth bearing in mind that Danish VAT is a complicated subject, so ApS should keep up to date with its tax obligations and seek expert tax advice to be able to avoid any potential VAT miscalculation problems in a timely manner.

Filing an annual report by a Danish ApS company

Limited liability companies (ApS) in Denmark are required to file an annual financial report. It should be sent to the relevant institutions by the prescribed deadline, along with the relevant attachments. The entity responsible for both the preparation and delivery of the company's report is its board of directors, which may also be referred to as the company's management.

Danish shelves with limited liability are required to comply with the Financial Reporting Act, which classifies companies according to various categories. This classification determines the requirements for ApS to file an annual report. Typically, an ApS is classified in Class B, which in this case means that its annual report should include such elements as:

• balance sheet,
• a document describing the activities of the board of directors (if it has more than one board member),
• accounting practices adopted,
• profit and loss account,
• the opinion of the board of directors.

Reporting class B is divided into two subcategories: class B and class B for microenterprises. Both of these classes are required to meet virtually the same guidelines for filing an annual report/financial statement. The only difference is that micro-enterprises are exempt from the requirement to present the company's accounting practices, which are required of other Class B companies.

If you meet the following conditions, your ApS company most likely belongs to Class B for microenterprises:

1. In the last two fiscal years:
• your ApS company's balance sheet was a maximum of 2.7 million kroner,
• the net turnover of your ApS company was a maximum of 5.4 million kroner.
2. In the last fiscal year:
• Your ApS company had a maximum of 10 full-time employees.

Annual reports with corresponding financial statements for limited liability companies must be filed no later than six months after the end of a company's fiscal year. This means that annual reports must be registered by June 30 if the ApS company's fiscal year coincides with the calendar year from January 1 to December 31. Filing of annual reports is done through the Virk.dk online platform, under the "Regnskab-basis" section.

Danish ApS company bank account

Erhvervskontoen is the official company account in Denmark, linked to the company through a tax identification number (CVR). It can be compared to a private business account, which in turn is linked to the business through a personal number.

Before opening a bank account for a Danish limited liability company (ApS), the first step is to choose the right bank. It is possible to use the services of the bank where you already have a personal account. You can also, of course, decide to choose another bank. The fees associated with opening and maintaining a business account can vary significantly, depending on the bank and the range of services offered. Before making a final choice, it is advisable to think about and compare at least a few different options. In order to avoid possible problems during the process of opening a bank account for a company, it is advisable to carry documents confirming the legitimacy of the company. In addition, it is essential to have personal documents to confirm your identity.

Every ApS company that is registered in Denmark is required to have its own company account. This is necessary in order to effectively separate the company's accounting from the private finances of its owners. In addition, companies are required to have a NemKonto business account to ensure transparency and effective financial management.

Handling bookkeeping for an ApS company

When handling bookkeeping for a Danish limited liability company (ApS), it is important to record all financial operations on a regular basis. Many companies choose to do their own bookkeeping using available online programs such as Billy, Dinero, Uniconta, e-conomic and Dynaccount. Alternatively, one can use the services of a professional accountant or auditor to assist in the daily recording of income, expenses and assets and liabilities.

Denmark has clarified regulations for the bookkeeping of limited liability companies, which set rules for recording financial operations. The four main rules read as follows:

1. Recording of operations should take place as soon as possible after their execution. This allows chronology to be maintained and makes it easier to control the company's finances. Prompt registration also helps prevent situations in which important documentation may be overlooked or old receipts are lost.
2. Any recording of operations must be based on documentation, such as a bill, receipt or invoice. Both paper and electronic forms are acceptable.
3. Documentation directly related to the bookkeeping of the Danish ApS company must not be removed or destroyed in any way.
4. The company's records should be kept securely for a period of 5 years and must be readily available upon request from government authorities.

To ensure completeness, each attachment to a registered transaction is given another identifier. The attachment should contain the following basic information:

• date of the transaction,
• the invoice number,
• information regarding the seller,
• tax identification number (TIN).
• VAT identification number and its share of the amount (if we are a registered VAT payer).

In addition to this, the attachments should also meet the requirements of Danish accounting law.

Afstemning, or in other words checking the degree of compliance, is an important aspect of Danish ApS' accounting control. It is good practice to carry out this process on a regular basis, avoiding postponing it until the very end of the fiscal year. In this way, there is no need to analyze a full year's worth of company account statements to check compliance with the company's accounting. Cyclical afstemning also makes it possible to prepare the annual report quickly and without problems.

Conducting an audit at an ApS company

ApS companies in Denmark must submit annual financial reports to the relevant state authorities, which should reflect the company's actual economic situation as closely as possible. For this reason, most Danish ApS companies must undergo an audit, which consists of a review of financial reports by an independent, certified auditor. The purpose of conducting such an audit is to officially confirm that the content of the financial report is consistent with the company's true assets, liabilities, income and expenses.

ApS companies, or limited liability companies, are required to be audited unless they meet the criteria for a small company classified as Category B. The conditions that must be met are:

• total assets do not exceed DKK 4 million,
• net turnover does not exceed DKK 8 million,
• the number of full-time employees is less than 12.

If a company does not have an imposed audit requirement, it can still voluntarily decide to have its annual financial statements reviewed by an auditor. Such a decision can be made when the company's owners decide to do so at an extraordinary shareholders' meeting. This decision becomes binding and final once it is documented in the minutes of the meeting, which should be registered with the Business Office.

Companies often make the decision to conduct a voluntary audit mainly with a view to maintaining a credible image of their financial situation and providing stakeholders, such as investors or board members, with certainty about the company's financial condition. The auditor, as an external, independent and publicly recognized person, assesses the company's financial situation, which brings additional confidence.

Payment of remuneration in the case of ApS company owners

The owner of a Danish limited liability company (ApS) has two options when it comes to receiving remuneration: he can collect salary or receive dividends. However, direct transfer of money from the company's account to the owner's private account as salary is not allowed. According to current Danish law, there must be complete separation of the company's finances from the private finances of the owners. This is due to the fact that a private person, such as the owner of the company, and the ApS company are separate legal entities, unlike when dealing with a sole proprietorship.

According to the law, all members of a limited liability company (Ltd.) are considered employees, including the owners. For this reason, if they wish to receive a salary from their company, they must go through the following process:

1. Registering the company as an employer using Virk.dk.
2. Preparing an employment contract or director's contract for the owner of the company, i.e. for yourself.
3. Preparing a monthly payroll statement for yourself.
4. Reporting the salary received by yourself to Skattestyrelsen for correct taxation.

Very often there are doubts about whether there is a salary cap in a limited liability company. The answer to this question depends on the situation. The owner of the company does not have the ability to pay himself a salary in excess of that which would have to be paid to, for example, an employed employee for equivalent work. If a much higher salary is paid than is accepted, there is a risk that the tax authorities may consider the additional amount to be a taxable dividend.

If the company owner decides for some reason that his salary will not be paid that month, it is possible to make what is known as a "nil declaration" by notifying Skattestyrelsen. Forgetting to notify such a declaration can result in a fine of 800 kroner.

As mentioned above, the business owner can also exercise the option of receiving dividends from the limited liability company into his private account as an alternative to salary. Dividends represent funds that the company pays out to shareholders and other investors. The key is to ensure that dividends are properly recorded. Whether the business owner receives a salary or decides to pay a dividend, it is necessary to pay the tax due. Companies are required to report and settle with Skattestyrelsen, and for this they can use LetLøn available at skat.dk. Through this calculation program and payroll system, it is possible to make the notification.

General meeting at Danish company ApS

A generalforsamling, also known as a general meeting, is an annual meeting of a company's owners where key decisions about the company's future are made. Under current regulations, a Danish limited liability company (ApS) is required to hold at least one meeting per year. Once the meeting is over, official minutes are created to record all the findings and decisions made by the owners during the session.

There are two types of general meetings - ordinary and extraordinary. At an ordinary meeting, there are specific requirements for topics of discussion or decision-making. These include:

1. determination of profit disposition or loss coverage in accordance with the approved financial statements,
2. possible modification of previous decisions on plans to revise future financial statements of the company, if there is no obligation to revise in accordance with the Annual Accounts Law or other legal regulations,
3. approval of the financial statements,
4. other issues that, according to the company's Articles of Association, must be discussed at the shareholders' meeting.

Holding an extraordinary general meeting is necessary in situations where immediate decisions concerning the company are required that cannot be postponed until the next regular shareholders' meeting. For example, this may include the need to change the composition of the board of directors or make significant modifications to the company's articles of association.

There are certain requirements for the organization of a general meeting. Meetings must be held regularly and scheduled on an appropriate date so that the approved annual report can be submitted to the Danish Enterprise Authority before the prescribed deadline set by the Company Accounting Act. It is also necessary to create minutes of the meeting and send them to the Danish Business Authority as confirmation that the annual report was approved at the meeting.

The minutes of the general meeting session should include the following:

• introduction: it must be clearly stated for which type of company the decisions are made, including the name of the company and the tax identification number (CVR),
• information about the chairman of the meeting, who signs the minutes as the person responsible for their accuracy,
• the report of the management or supervisory board, and information on whether the annual report was approved at the meeting,
• indication of the proposals and decisions made at the assembly,
• the date when the decisions described in the minutes were made,
• signature of the chairman.

A meeting of the general assembly of a Danish limited liability company may be attended by all owners of the company's capital. They have the option to choose whether they want to attend the meeting in person, or whether they prefer instead to give a power of attorney to another person to represent their interests at the meeting. In addition, the company's auditor may also be present at the meeting. The owner of the capital also has the right to bring an external advisor with him. The management or supervisory board may also invite other persons to observe the meeting, unless this conflicts with the company's articles of association.

Board members in an ApS company

Under the provisions of the Danish Companies Act, every limited liability company registered in Denmark is required to have a board of directors, which must include at least one person. Usually this position is assumed by the owner of the company, but a board of one or more directors may also be appointed.

ApS also has the option of appointing a board of directors, which is especially recommended for larger companies with dozens of employees. The board of directors is responsible for running day-to-day operations and conducting audits, while the board of directors is in charge of developing the company's long-term strategy at a higher level. When a limited liability company has only a board of directors, the board of directors usually has the role of managing the company's strategic and day-to-day operations. The management structure is then defined in the company's articles of association.

When the board of directors and the board of directors operate in parallel in a limited liability company, they have separate tasks, but they still cooperate closely with each other on specific issues. The board of directors is directly subordinate to the board of directors, which oversees the implementation of the company's overall strategy. When a board of directors is established in a limited liability company, it is the board of directors that has the duty to elect the board of directors. In a situation where the board of directors is appointed after the executive board, it will often be the same people who served on the executive board when it was formed.

If the company's board of directors includes only the executive council, it serves as the company's highest governing body, also being responsible for strategic management. If necessary, the executive board can later be replaced by the supervisory board.

Ownership structure applicable to the ApS company

The ownership structure of a limited liability company (ApS) consists of two types of owners - beneficial and legal.

Beneficial owners are natural entities that own at least 25% of the shares or control more than 25% of the voting rights. They may also have other powers, such as the appointment of board members or veto power over decisions made.

Legal owners can be companies or individuals who own at least 5% of the shares or voting rights.

The need to register both legal and beneficial owners with Erhvervsstyrelsen stems from the need for transparency in the ownership structure, which contributes to the prevention of financial crimes, such as tax fraud, and allows for better control of business operations. This allows regulators to more effectively supervise and enforce compliance with regulations on ownership structure and business conduct.

If an ApS company has neither beneficial or legal owners, it is obliged to report this fact to the relevant authorities. It is worth noting that the same person can act as both the legal owner of the enterprise and the beneficial owner. Such a situation can occur, for example, if the person is the sole owner of the company.

ApS business operations and transactions

Sale of ApS shares

As is the case with other assets, shares in the Danish company ApS can be freely sold. In fact, this means that it is possible to easily transfer ownership of a share from one owner to another. No major restrictions apply when carrying out this process. The owner of ApS shares can be either an individual or a legal entity.

If you own shares in a limited liability company (ApS) and plan to sell or transfer them, it is necessary to draw up a share transfer agreement. Such a document specifies the parties to the agreement, i.e. who is the seller and who acquires the shares in question, and what portion of the shares is involved in the transaction. This agreement is important both for the parties involved in the transaction, as well as may be relevant to taxes and other shareholders of the company.

Various methods of selling shares in an ApS company are possible:

1. Internal sale between co-owners with right of first refusal - If the company's articles of association provide for the right of first refusal, the current co-owners have priority to purchase the shares. The price is usually determined by an auditor.
2. Sale of shares to persons outside the company - Prices of ApS shares can be freely determined. The transaction can be made by making offers to third parties. In this case, the price is often negotiated or determined based on market price trends and is not subject to top-down regulation.
3. Sale of the company's shares to a close family member - In such a situation, the transaction must be carried out in accordance with the actual value of the shares, in accordance with applicable regulations and a prior assessment of the value by an auditor.

The transfer of shares in an ApS company is generally done in the same way as the transfer of other assets, so it is important that the buyer and seller agree in advance on such matters as the sum of all the shares to be transferred, the transfer date and the purchase price of the shares. These terms can be written down in the transfer agreement. Additional conditions may include a change in the company's board of directors, the drafting of an ownership agreement, the method of payment of the purchase price (e.g., through seller financing), a non-compete clause and a seller protection clause.

Purchase and sale of a Danish ApS company

The acquisition and divestiture of a Danish limited liability company (ApS) are processes that must be meticulously considered from both legal and business perspectives. Before deciding to purchase a company, it is important to thoroughly examine its operations, including an analysis of its finances, liabilities, contracts, risks, business relationships and human resources. In the situation of a purchase transaction, negotiation of terms and conditions is key. The key document that governs such a transaction is the share or asset sale agreement, tailored to the terms and preferences of the parties. In many cases, shareholder approval is also required, unless the company's articles of incorporation contain other arrangements. Once the agreement is signed, the transaction should be immediately registered with the Commercial Register.

When selling a company, it is important to prepare it for the transaction, which includes resolving any financial problems, providing full documentation and conducting due diligence. Consulting can be helpful, especially in negotiations. Once an agreement is reached, the parties can draft a sales agreement and complete the necessary registration formalities.

It should be noted that when selling an ApS company, there are special rules regarding the transfer of shares, which must be followed in accordance with commercial law and the company's articles of association. Going through the process of buying or selling a company requires careful analysis and cooperation with qualified lawyers and business experts, which significantly facilitates the entire procedure.

Savings strategies for starting an ApS

If you are planning to start your own limited liability company in the future, while currently being an employee in a Danish company, there are two available options for savings programs that can help you significantly.

The Founder's Account Program and the Entrepreneur's Program are two options that allow you to save money for your future limited liability company. By making contributions to special Founder's or Entrepreneur's accounts, you can take advantage of their tax deductibility. These provisions are designed to make it easier to accumulate funds to start and grow your own business. The choice between a founding or entrepreneurial account depends on individual preferences and tax situation, especially in terms of tax rates.

If your tax rate is not among the highest, it is recommended that you choose the Founder's Account Program. Contributions to this type of account allow a tax deduction of about 27%. This means that you will have to pay 27% tax on the amount that has been deposited into your account. However, if you pay tax at the highest rate, a more favorable choice may be to use the Entrepreneur Program, where contributions allow a tax deduction of about 52%.

Savings in a Founder's or Entrepreneur's Account can be used to pay for the costs of setting up your own limited liability company (ApS). However, there are rules regarding when you are considered a "founder", as well as procedures related to further amortization, which are a bit more technically complex. Usually these regulations are quite complicated, so it is worth consulting an experienced accountant for specific advice.

Withdrawal of contributed share capital from Danish company ApS

The sum of 20,000 kroner, which was paid as the required share capital for an ApS company at the beginning by its founders, cannot be withdrawn as long as the company remains in business. This amount is intended to provide financial stability and operational support for your ApS, acting as the capital foundation needed for business operations.

Only at the termination of the company's operations is it possible to return these funds. During this time, they remain placed in the company as a means of security for investors and other interested shareholders. At the time of termination of operations, it is the established laws and the company's articles of association that will determine how and when these funds will be returned.

These regulations are based on the fact that the founders of an ApS company, as the name implies, have limited liability. This means that their liability is limited to the initial capital paid in at the start of the business, or 20,000 crowns. In practice, when the company encounters financial difficulties, their liability is limited to the amount invested in the company. As a result, creditors or aggrieved parties cannot demand that the founders of an ApS company cover the company's debts beyond the amount of their capital contribution, for example, from their personal funds. This legal structure protects the partners' private assets from the risks associated with the company's business activities.

Holding company in ApS organizational structure

Entrepreneurs have the option of creating a Danish limited liability company structure that consists of a holding company and an operating company. This arrangement opens up a number of strategic opportunities for management and business optimization. A holding company, although it does not meet the traditional definition of a company, is a legal form whose main purpose is to own shares in another company, usually an operating company, which is responsible for directly running the business.

The creation of such a structure involves the establishment of two separate legal entities. The first, the operating company, is in charge of direct business operations, such as production, sales or provision of services. The second entity, which has a holding function, holds an equity stake in the operating company, enabling it to accumulate profits and reinvest them or protect it from various business risks.

The use of share capital is one of the main advantages of such an arrangement. Instead of investing 20,000 crowns twice to establish two separate companies, an entrepreneur can use the same amount as a contribution to both entities. This is possible due to the specific legal and financial nature of the holding and operating company structure.

Another advantage of this solution is the protection of assets. When the holding company holds the assets of the operating company, in the event of possible financial problems or bankruptcy of the latter, the assets accumulated in the holding company are effectively protected from the creditors of the operating company. This solution makes it possible to significantly reduce business risks and protect important assets from unforeseeable situations.

Such an organizational structure also allows for more effective tax planning and more efficient management of the group, which is at the same time reflected in greater flexibility in decision-making, both strategic and investment. As a result, entrepreneurs are able to respond more effectively to changing market conditions and optimize the efficiency of their operations.

Closure of a Danish ApS company

The closure of a Danish limited liability company (ApS) can occur in various ways. It all depends on the company's legal obligations and its current financial situation. If the company's financial condition is stable, you can consider liquidation with a declaration of payment or voluntary liquidation. In the first case, the owners of the capital must notify the relevant authorities that the company has no financial arrears that need to be paid. In the case of voluntary liquidation, despite the existence of debts that have not yet been paid, the company undertakes to settle them by appointing a liquidator who is responsible for the disposal of assets and the payment of all liabilities.

When a Danish ApS company is insolvent, liquidation by bankruptcy and involuntary liquidation can occur. Liquidation by bankruptcy occurs when a company has debts that it is unable to pay. Such a situation forces the company to file for bankruptcy. Following the filing, the company's assets are used to pay off the debts, and a superintendent is appointed to manage the liquidation of the company. Forced liquidation of the company occurs when the company fails to comply with the applicable laws on the operation of Danish companies. In this situation, state authorities, such as Erhvervsstyrelsen, may decide to forcibly terminate the company's operations.

ApS company termination costs

The costs of winding up a Danish ApS company can vary and depend on a number of factors. First of all, one should consider the current financial state of the company, the type of assets and liabilities it has, as well as the complexity of the formalities involved in the liquidation process.

In many cases, it is necessary to use the services of a professional lawyer or law firm to make the entire liquidation process easier and more efficient. Expenses related to legal services include fees for the lawyer's work and various fees related to making sure that the liquidation process is carried out in accordance with the law and that all paperwork is completed correctly.

It is also important to take into account the tax consequences that are inherent in the liquidation of a company, and which will certainly in some way affect the final cost of ending the business. The company being closed down will be required to settle with all creditors and debtors and pay any outstanding tax payments, which will also certainly generate additional costs.

In addition, it will also be necessary to pay other outstanding obligations, including payments to suppliers, employees. The total costs associated with the liquidation of an ApS company can vary depending on the individual circumstances of each company. For this reason, it is so important to consult a professional to get an accurate cost estimate and understand the liquidation process in your situation.

Other issues related to the operation of a Danish limited liability company (ApS)

MitID Erhverv when hiring employees in an ApS company

MitID Erhverv is a special tool for Danish companies that employ one or more employees and need them to use various online services on behalf of the company. The procedure for obtaining MitID Erhverv involves registering and setting up a company account through the MitID-Erhverv.dk online platform.

Employees can access a variety of functions in MitID Erhverv, such as filing annual tax returns, reviewing company correspondence and reporting maternity leave for other employees employed by the company. It is crucial that employees are properly authorized by the company to use certain self-service services before using MitID Erhverv. Very often, the appropriate authorizations are given to employees directly within MitID Erhverv. However, there are services that also require separate authorization management within their framework, such as those related to the Danish Tax Authority.

Employees can also use their private MitID account to authenticate themselves when logging into self-service systems on behalf of the company. This arrangement allows employees to use one MitID for both private matters and work duties, rather than having a separate MitID for company purposes. However, in order to be able to do this, both the company and the employee must agree to the terms of using the private MitID for professional purposes. The employee's personal data is protected and completely separate from that of the company, regardless of the preferred method of logging into the system. In addition to this, the employee also has the option of creating a separate MitID, which can only be used to log into company self-service systems related to his or her work duties.

Handling ApS company's digital correspondence

Once a Danish ApS company has a CVR number assigned to it, an electronic correspondence mailbox, or Digital Post, is automatically created for it. Digital Post is a tool used by public institutions, which use it to send various types of messages to a company operating throughout the country. Regularly checking and reading the correspondence that goes to the Digital Post is very important. It is worth bearing in mind that in some situations public institutions still send traditional mail instead of electronic mail. Nevertheless, according to Danish law, the manner in which correspondence is received is of little consequence - both traditional and electronic correspondence have identical legal effects.

If you have the appropriate authorization to represent the company in question, you also have the option of logging into the Digital Post company mailbox yourself using your private MitID both through the Virk platform and using the Digital Post app. If you are not authorized and able to use your private MitID for matters related to the conduct of Danish ApS business, your only option is to use MitID Erhverv, through which you will certainly be able to access the Digital Post company mailbox on the Virk platform. In order to log in to the system and view the company's received e-mails, your private MitID Erhverv account must be granted the appropriate permissions, which can be easily obtained through the Digital Post Permissions Portal.

When using private platforms, such as the popular mit.dk or e-Boks in Denmark, Danish companies can not only receive correspondence from public authorities, but also exchange correspondence with other companies. In the free versions of these programs, a company only has the option to receive electronic correspondence, with no available option to send it. To get the option to send correspondence, it is necessary to pay for access to the paid version of the program.

Payment of remuneration to a shareholder of an ApS company

In return for his capital contribution to a Danish limited liability company, the shareholder receives shares in the company. In addition, according to the company's Articles of Association, it is also possible to provide for additional compensation in the form of bonds issued by the company.

Making a cash contribution to the capital does not cause any trouble from a tax perspective for the Danish limited liability company. In the event that the value of such a payment exceeds the nominal value of the shares, the company is not obliged to tax the excess, treating it as a bonus. More details on this subject can be found in the Corporate Income Tax Act, in Article 13, paragraph 1, item 1.

If the tax authorities determine the added value resulting from the non-cash contribution, the company is not obliged to tax the increase in value compared to the established transaction amounts. This is usually considered compensation to shareholders in the form of shares whose value exceeds the original issue price. Importantly, the company can deduct from income based on this increased value, even if the founding agreement remains unchanged and the added value is not included in the company's official accounting records.

If the established transaction amounts exceed the value of the assets, the company is not allowed to write off the overpayment it has made. This issue is important for assessing the company's financial and tax health, as well as ensuring its proper operation.

Conversion from sole proprietorship to ApS company

In many cases in Denmark, entrepreneurs begin by operating as a sole proprietorship. Often, however, as the business grows and needs evolve, owners consider changing the form of their company to a limited liability company (ApS). This comes with a number of advantages, such as increased prestige, protection of private assets and easier access to financing.

Converting from a sole proprietorship into a limited liability company (ApS) is a process subject to certain requirements. To form such a company, the share capital must be at least DKK 20,000. Conversion from a sole proprietorship is only possible in the case of a newly formed ApS company or a company that has not operated before. The value of the shares must not be negative - the exception is if the company has benefited from the corporate tax system in the previous year.

Before converting a sole proprietorship, it is advisable to obtain an auditor's opinion on its value. In addition, it would be beneficial to consult with advisors and obtain the approval of possible collaborators and contractors. There is also the possibility of converting a sole proprietorship into an ApS without taxation, according to the Danish Company Conversion Act, which is exactly what tax succession is.

As required by the act, the takeover fee must be paid through shares in the new company. All operations of the business must be transferred to the new entity, and the conversion should take place within the first six months of the fiscal year.

One option for business transformation is to transfer a sole proprietorship to an ApS, where the entrepreneur becomes the sole shareholder. It is necessary to determine the value of acquisition and disposal and apply the principle of balance to avoid taxation during the transformation. The tax consequences of such a change can bring significant financial benefits to the owner of a sole proprietorship.

The transformation of a sole proprietorship into an ApS in Denmark is a procedure that requires in-depth analysis and completion of the relevant formalities. Nevertheless, the advantages associated with operating the company as a limited liability company may outweigh the potential difficulties, providing the entrepreneur with greater certainty and business development opportunities. It is advisable to consult with legal professionals and tax advisors to make sure that the process of converting the business structure is done in accordance with applicable regulations.

Priority right in an ApS company

In the event that any of the owners of a limited liability company (ApS) expresses a desire to sell their shares, the other shareholders have a priority right to acquire them before the possible entry of a competitor or other outside investor. However, in order for this privilege to apply to the other shareholders, it must be expressly stated in the company's articles of association or charter. In practice, ownership of shares in a company does not guarantee an automatic right to priority purchase. It is necessary to regulate this issue explicitly in the company's governing documents.

In a situation where one of the holders of the right of first refusal does not exercise this right in the event that another decides to dispose of his shares and the other shareholders do not express interest in acquiring them, the person selling has the option of looking for another potential buyer. To put it another way, although the other shareholders have priority in acquiring the shares, they are not obliged to purchase them.

There are a number of methods to determine the value of shares, so owners should decide which one to use, especially in the context of the right of first refusal. It is important for entrepreneurs to specify precisely the chosen method in the company's governing documents. This will give them certainty as to how the value of the shares will be determined, however, should they decide to exercise their right of first refusal.

Comparison of ApS with A/S

When choosing a company structure, you should consider your situation, goals and available capital. The costs associated with registering a limited liability company (ApS) and a joint-stock company (A/S) differ significantly. In both types of companies, the owner has only financial liability, not personal liability. Nevertheless, there are noticeable differences between the two.

The most common form of company in Denmark is the ApS, however, its formation requires a minimum capital contribution of DKK 20,000. In order to establish an ApS, it is necessary to have a founding document and articles of incorporation. As the owner of an ApS, you are free to choose whether you want to form a board of directors and a board of directors, or limit yourself to the board of directors only.

A joint-stock company (A/S) is the most extensive form of company in Denmark, and its creation requires initial capital of at least DKK 400,000. As the owner of an A/S, you are required to appoint a management board and a board of directors. The process of establishing an A/S also involves drafting a founding document and articles of incorporation.

You should consider choosing a limited liability company (ApS) as your preferred form of business. While a joint-stock company (A/S) also has many advantages, an ApS offers advantages both for those willing to invest larger start-up amounts and for those who value greater flexibility in management. It is therefore an attractive option for entrepreneurs.

Choosing the ApS company's field of activity

When registering a company in Denmark, including a limited liability company, you are required to assign an appropriate industry code. During this process, you will be asked to select the industry that corresponds to your company's activities. This is important so that other entities can quickly see what a particular company does. If your company operates in several sectors, it is possible to register additional industries.

The main industry, as can be easily inferred from the name itself, reflects the company's main activity that generates the most added value for the business. An entrepreneur is free to choose which industry he will ultimately assign his business to. The choice of the main industry for the company is important for various formalities, such as the obligation to pay VAT or other taxes. This applies both at the beginning of the business and if the industry changes during the course of the business or expands into other areas. If another activity becomes dominant for a longer period of time than the activity that was previously considered the main one, it is necessary to officially change the company's main industry.

A secondary industry is used to identify another company's business when the business grows on a wider scale, that is, in more than one sector. A company can officially register up to three additional industries. The need to add secondary industries only occurs if the secondary activity generates at least 10% of the company's total turnover and reaches at least 300,000 crowns per year. Nevertheless, due to the requirements of other institutions, it is possible to register additional industries voluntarily, even if these criteria are not met.

Choosing the right industry code for ApS

When registering a Danish limited liability company (ApS), an important step is choosing the right industry code, specifically known as the NACE code. This code helps determine a company's main economic activity and is used by the public administration and financial institutions in Denmark to classify companies.

When selecting an industry code for ApS, it is crucial to carefully analyze the main services or products the company will provide or produce. The industry code should accurately reflect this activity to avoid confusion during possible business transactions or tax audits.

The assignment of an industry code for ApS is based on the specifics of the business. For example, if a company is engaged in retail trade, the appropriate code may be the one related to retail sales. Conversely, if the company provides consulting services, the industry code related to the consulting services business should be selected.

A key aspect is to ensure that the choice of industry code is in line with current regulations and standards in Denmark. In addition, it is important to ensure that the company's business is clearly identified to clients, contractors and government agencies.

To be sure of the characteristics and compliance of the chosen industry code, it is advisable to consult experts in commercial and tax law. It is also an important step to regularly monitor and update the industry code to adapt it to the company's changing needs.

Division of ApS company shares into capital classes

In the case of a Danish limited liability company, the equal rights of all equity shares can be modified by dividing them into different classes. Typically, there is a distinction between Classes A and B, with Class A usually having greater voting rights than Class B. Additionally, there can sometimes be a Class C, which has the lowest value.

There are many methods of differentiating rights between classes, such as granting them different voting rights at shareholder meetings, setting a minimum share of profits, preferential rights or priority options to purchase shares of another class. By dividing into capital classes, it is possible to give different rights to each class.

Beneficial value sharing of equity shares can be strategic when a company seeks a passive investor. This can include offering Class B shares that are non-voting. This allows control over decisions to remain in the hands of selected equity owners, such as the managing director.

In the Articles of Incorporation, it is necessary to precisely define the rights of each class of capital, including a description of the differences between them and a determination of their size. If the capital shares have not been previously divided, a proposal for such a division must be presented at a general meeting and receive approval through voting.

Danish Accounting Act vs. ApS

ApS in Denmark must comply with the provisions of the Accounting Act, which sets out general rules for bookkeeping, including procedures for recording documents and archiving accounting records. These regulations apply to all companies in Denmark that are not subject to government or local authority control. Failure to comply with these regulations may result in requests for additional information from public authorities or comments in the company's annual financial report.

The general guidelines of the Accounting Law impose certain requirements on bookkeeping. It is important that accounting records be protected from destruction or disposal, and that the recording and documentation process be carried out as quickly as possible. All accounting entries must be supported by appropriate documents. If accounting operations are carried out in a currency other than Danish krone, it is necessary to determine the correct exchange rate. You can choose the average exchange rate or the one in effect on the day of the transaction. The Accounting Act also sets guidelines for the preparation of annual financial statements for companies, which vary depending on the accounting classification of the company in question.

As of the beginning of 2024, a new accounting law is in effect that requires digital accounting. This means that all companies are required to use digital accounting systems that meet certain legal standards. All accounting documents must contain key information, such as the date of issue, the amount, a description of the product or service, details of the sender and recipient (including their personal information and identification number), information on the amount of VAT, and payment details. All this data should be stored digitally.

New rules for electronic accounting will be phased in, depending on the classification of the business:

• Starting January 1, 2024, the Danish Business Authority will publish an overview of available accounting systems.
• Starting July 1, 2024, companies in accounting classifications B, C and D will be forced to comply with the new requirements and do their accounting electronically.
• In 2026, it is estimated that companies in accounting classification A that have an annual net turnover of more than DKK 300,000 for two consecutive years will be required to keep their accounts using an electronic system.

Derogations from limited liability in an ApS company

It is often pointed out that in the situation of running a Danish limited liability company (ApS), the owner is not obliged to personally bear the debts of the company, which implies that he does not put his private assets at risk. In theory, this is in line with reality, however, in practice there may be some exceptions to this arrangement.

When the owner of an ApS company wants to receive financial support from a banking institution, but the only collateral it can offer is a share capital of DKK 20,000, it is likely that it will have to include either a personal guarantee or a pledge of its private assets. Analogous conditions may be required when working with larger creditors. It is also worth noting that when the company reaches a sufficient value of assets to take over the owner's liabilities, it will be possible to exempt oneself from individual securities.

In extreme situations, when an entrepreneur conducts his business in an extremely irresponsible manner, resulting in significant losses not only to customers but also to creditors, there is a risk of being held personally liable as a director and shareholder. An example of such behavior could be when the owner of an ApS company signs contracts on behalf of the company, despite the knowledge that the company will not be able to repay them due to its difficult financial situation.

Another important rule for Danish limited liability companies is that when half of the company's capital is lost, the owner of the company has exactly 6 months to call an extraordinary shareholders' meeting. According to the current legal regulations, the company's board of directors is then obliged to present a report on the company's financial situation and to propose possible measures to be taken, including consideration of the possibility of liquidating the company.

When the owner of a limited liability company fails to raise new capital for the company, there is a risk of personal liability to creditors, potentially jeopardizing his private assets. For this reason, compliance with these regulations is very important.