A limited liability company, also known as ApS (Anpartsselskabe), is one of the most popular legal forms in Denmark. This type of company is characterised by its flexibility and the benefits associated with limited liability, attracting both entrepreneurs acting alone as well as groups of investors.
One of the most important features of an ApS is the flexibility of the ownership structure, which allows one or more owners to hold shares. The owners can be either individuals or business entities. An ApS company has the status of an independent legal entity, which means that it has legal capacity separate from its owners. One of the key elements of this structure is the limited liability of the owners, which is an important feature to safeguard their private assets. In the event of any liabilities and claims, the financial liability of the owners is limited only to the amount of capital they have invested in the company. The guarantee of financial security makes this legal form particularly appealing. The ApS company allows the owners to concentrate on the development of the business, minimising personal risk.
The process of setting up a limited liability company (ApS) begins with the need to pay initial capital. The minimum amount of this capital is DKK 40,000, which constitutes the financial security and basic capital of the company. The ApS company is required to keep full accounts, which includes documenting all financial and operational transactions. In addition, the company is required to submit annual reports in digital form. This aspect supports the transparency of the company’s operations and enables regulators and stakeholders to have a reliable understanding of the company’s financial health. Registering an ApS company in Denmark costs DKK 670 – this fee covers all formalities. The registration process, although subject to certain costs, is relatively straightforward, enabling the business to start up quickly.
Under the current Companies Act, a limited liability company (ApS) is required to maintain a detailed register covering various aspects of its structure and operations. Within this register, an important element is the maintenance of an ownership ledger that accurately documents the interests of all shareholders in the company. This brings clarity to the ownership structure, enabling the company to effectively manage and monitor its capital structure. In addition, ApS is required to record information on mortgages, which includes a record of any financial collateral on the company’s assets. This area of the register provides information relevant for assessing the financial stability and creditworthiness of the company. Another important aspect is the registration of all legal and beneficial ownership relationships. This includes, but is not limited to, records of agreements, contracts, and any other legal obligations that affect the company’s assets and operations. The requirement to have a board of directors is another important element under the Act. The board of directors is responsible for overseeing the day-to-day affairs of the company. Importantly, the composition of the board of directors can be supplemented and modified, giving the company the flexibility to shape the management structure according to its needs and the nature of its business.
The limited liability company (ApS) not only offers entrepreneurs the opportunity for efficient management, but also fosters dynamic business development in the Danish market. The main feature in favour of the ApS is its ability to provide a balance between entrepreneurial flexibility and financial protection for its owners. A limited liability company is certainly an attractive option for entrepreneurs who are keen to minimise personal risk, while at the same time enabling them to adapt effectively to changing market conditions.
