ApS vs. holding company

The possibility of creating a Danish limited liability company structure consisting of a holding company and an operating company opens up a number of strategic options for entrepreneurs to manage and optimize their business. A holding company, while not being a company in the classic sense of the word, is an organizational form whose primary function is to hold shares in another company, usually the operating one, which is engaged in the direct conduct of business.

Such a structure is formed by establishing two separate legal entities. The first, the operating company, is directly involved in day-to-day business operations, production, sales, provision of services, etc. The second company, which has a holding function, owns the equity interests in the operating company, allowing it to accumulate profits and reinvest them or protect them from various business risks.

One of the key advantages of such a solution is the efficient use of share capital. For example, instead of investing the amount of 20,000 kroner twice to establish two independent companies, an entrepreneur can use the same amount as a contribution to both companies, which is possible due to the legal and financial specifics of the holding and operating company structure.

An additional advantage is the protection of assets. In a structure where the holding company holds the assets of the operating company, in the event of financial problems or bankruptcy of the latter, the assets accumulated in the holding company remain protected from the creditors of the operating company. This strategic solution minimizes business risks and protects key assets from unforeseen events.

This type of structure also enables more efficient tax planning and better management of the holding company group, resulting in greater flexibility in strategic and investment decisions. This allows entrepreneurs to better adapt their operations to changing market conditions and maximize business efficiency.