Closing down a Danish ApS company in Denmark
A Danish entrepreneur who decides to close a Danish limited liability company (ApS) should first choose the appropriate procedure depending mainly on the company’s material condition. In Denmark, there are five important types of proceedings and closures, such as:
- Restructuring - to prevent bankruptcy proceedings from commencing, the company has the option of filing a restructuring petition with the court if it can restructure both its finances and operations, and the court will appoint a restructuring administrator to oversee the entire proceedings.
- Liquidation on the basis of a statement of shareholders - if the company is solvent, i.e. has fewer debts and more assets, it can be liquidated voluntarily, in which case it is required to publicly announce its decision, after which creditors have three months to file their claims. A liquidator, such as a lawyer, is appointed to handle the liquidation proceedings, and once the company is liquidated, its shareholders are protected from future claims.
- Bankruptcy - if the company is not solvent, bankruptcy proceedings will be initiated, which will lead to its closure.
- Voluntary liquidation - all debts of the company should be paid in order for the company to be voluntarily liquidated. The company's partners are required to sign a special declaration to pay the debts at the time of the company's closing, and thus will be held fully liable if, however, any debts remain or new debts arise. There should also be no claims or lawsuits at the time of the company's liquidation.
- Before closing the company on the basis of the shareholders' statement, all accounting formalities should be completed,
- Then, before deregistering the VAT, declare this tax for the last period,
- If the company has employees, the last payment must also be made and make sure that all the employees' taxes have been declared, the employer must also be deregistered,
- After which the tax office must be notified when the company will be deregistered from the corporate income tax register, this date is usually not the same as the company's closing date. The first step is to declare income tax by the last tax day. After declaring corporate income tax, the tax office will issue a final statement (within 3-6 months of filing), confirming the settlement of VAT and other taxes. In Denmark, the voluntary liquidation process is lengthy, but it does not take as long as three months for creditors to file claims,
- After obtaining a certificate from the tax office that all debts have been paid, a statement confirming all debts of the company have been paid must be drawn up, which must be signed by the shareholders, and then a final application for closing the company can be submitted to the office.The final closing of the company will be implemented after the application is submitted up to two weeks. Make sure that the accounting is closed and check that VAT and employee taxes are declared for the open months. Any totals on Skattekonto must be dissolved, and the company must be deregistered both as an employer and as a VAT payer, and a tax return for the previous tax year must be filed on SKAT Erhverv. On the other hand, for the year of closure, you must file a special manual tax return in PDF, or "ophørende selvangivelse." You also need to zero out all income tax totals and adjust the tax payments for the current year to match the company's actual income tax for the ending year, and pay the tax. Finally, apply for a statement from the tax authority - betalingserklæring - and prepare a statement from the shareholders - betalingserklæring - then, after receiving the statement from the shareholders and from SKAT, close the company on VIRK.
- Forced dissolution - in Denmark, the court has the right to order forced dissolution if the company has not filed its annual report by the deadline,the managing director resigns,the company is due for an audit and the auditor resigns without appointing a new one.In this case, the court will appoint a liquidator to review the company's financial situation. If the company is insolvent, it will be put into bankruptcy proceedings, and if it is solvent, it will be dissolved.
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