Capital requirements for ApS
A contribution of at least DKK 20,000 in capital is required to establish an ApS (Danish limited liability company), necessitating the capacity to provide such an amount. Therefore, you must save sufficient money or assets to meet the minimum capital requirement. After contributing capital to the company, the capital owners will receive shares in return.
Capital contribution for ApS:
The minimum capital requirement of DKK 20,000 means that it is possible to contribute more than this amount but not less. If you choose to invest more capital, it could be advantageous to establish the company with a premium. This involves registering the nominal capital as DKK 20,000 and allocating the additional contribution to the company's free reserves.
Personal loans to the company:
Another option is to provide a personal loan to the company equivalent to a portion of your desired capital contribution. The benefit of this payment is that it's tax-free, which can be advantageous in several situations. However, it's crucial to prepare a promissory note, which serves as evidence of the loan.
Advantage of ApS capital size:
The capital size required for an ApS is a contributing factor to its appeal. In cases where a person does not have access to DKK 20,000 or assets valued at this amount, they can obtain the required capital through a loan or investments.
Equity shares for ApS:
The ownership interest that an individual holds in a company is referred to as a share or a stock, and these are the two types of capital shares. The founders of the limited liability company (Ltd in Denmark) divide the initial capital they contribute into shares. The share size can be determined freely, but it is commonly set at DKK 1 per share. If the company performs well and generates profits, these profits are distributed to the shareowners as dividends. Alternatively, the owners may opt to reinvest the dividends.
Increase in Company Value:
If a company generates profits over a period of time, it will accumulate more funds in its bank account or acquire additional assets, causing its value to increase. However, this doesn't imply that the company's capital will change; it remains the same. For instance, if you've contributed DKK 20,000 as share capital, it remains the constant value even if the company generates profits. This indicates that the company capital will be worth more per unit, resulting in the shares being worth more as well.
Capital Classification:
In a company, all shares typically have equivalent rights. However, the articles of association may specify that the shares are segregated into distinct classes of capital. In this case, the rights of the shares are determined by the category to which they belong. The articles of association must outline the differences between each class and the magnitude of each class.
Purpose of Capital Classification:
One of the motives behind categorizing capital into different classes is to distinguish the rights of the capital owners. For instance, it's feasible to determine that a specific class of capital should receive dividends before other classes.