Capital Approval for ApS
To establish a private limited company in Denmark, it is crucial to obtain capital approval which is exclusively granted by a lawyer or an accountant.
Purpose of Capital Approval:
The Danish Business Authority has established a particular threshold for the value of a private limited company. To comply with this requirement, the capital must be documented, such as through a stamped and signed bank statement confirming the deposit into a temporary business account. Alternatively, a deposit from a client account with a lawyer can also serve as proof of the capital. Hence, obtaining capital approval is essential to confirm that the capital requirement has been met.
Client account with a lawyer:
A client account with a lawyer entails depositing the funds required for establishing a private limited company (ApS) into a separate account until the process is complete. Once the formation of the private limited company is finalized, the lawyer will transfer the money to your new company.
Capital Approval via Bank:
It's also possible to obtain capital approval through the bank, but they typically impose a fee for this service. To confirm the availability of the required capital in the company's account at the time of its establishment, the banks must stamp and sign your payment.
Cost of Capital Approval:
The cost of obtaining capital approval varies depending on the method you select since there are numerous ways to get your capital approved. Thus, it's crucial to examine the available options and select the one that is most suitable for your situation.
Cost of Capital Approval through Bank and Lawyer:
Banks usually charge up to DKK 4,000 excluding VAT for capital approval. However, many law firms offer to approve the capital simultaneously while assisting with the formation of the private limited company (LLC in Denmark). Therefore, engaging a lawyer to help establish your ApS and obtain capital approval can often save you the bank fee. While you will still have to pay for the lawyer’s services, it’s usually less costly than solely obtaining capital approval through the bank.
Deposit Requirements:
As previously mentioned, a minimum of DKK 20,000 in company capital must be contributed. Nonetheless, it's possible to deposit more capital if desired. This may be done to give the impression that the company is larger or to increase the liquidity of the company from the start.
Contribution to ApS:
Yes, it's possible to make a non-cash contribution to establish an ApS. Such a contribution is referred to as an 'in-kind contribution' or a 'value contribution'. However, to be considered a contribution, these assets must possess genuine economic worth. For example, services cannot be considered as contributions because they don't possess genuine economic value.
In-kind Contribution:
If you don't have the required DKK 20,000 to establish an ApS, you can do so through a value foundation/portfolio contribution. Essentially, this entails contributing assets to the company in lieu of cash. These assets could include vehicles, industrial equipment, or tools. This approach provides you with the option of reaching the minimum share capital requirement by using assets, allowing you to establish an ApS without having DKK 20,000 in cash.