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A sole proprietorship is a form of business in which the owner has personal and unlimited liability for the company’s obligations. This means that the owner is personally responsible for the company’s liabilities, both business and tax. In the event of problems with the solvency of the company, the owner is responsible with their personal assets for the company’s liabilities, including the house, car, among others.

If you have decided to establish such a form of business, we will help you.
We will make sure that all the formalities involved are in the best possible order and that you receive a CVR number for your company.
By commissioning us to set up your company, you can be sure that the registration will be done correctly, so that you can focus on your customers and your business.
Open a Sole Proprietorship (PMV/EVS)

Start your sole proprietorship with us, it will be assured to avoid legal problems with your start-up.

You will receive:

Registration of a sole proprietorship.
VAT registration.

Requirements for a sole proprietorship:

• Number of owners: only one owner.
• Liability: personal and unlimited.
• Capital: There is no initial capital requirement.
• Accounting: there is no requirement to publish accounting data.
• Management: no management or board of directors required.

TAX on profits in a company
Private companies must pay tax on their profits, that is, tax on the amount that remains after expenses are deducted from income. A sole proprietorship is taxed in the same way as the salary of a regular employee.

Therefore, you must inform the Danish tax authority of your expected profit or loss by filling out a statement of expected income (forskudsopgørelse) in advance – just as ordinary employees do every year.

It is important to update the expected income data so that the advance income tax payments made each month are as close as possible to the amount of the final calculated annual income tax. The idea is to avoid an unexpectedly large tax liability at the end of the year.

Are you in doubt whether to start your business as a small proprietary business (PMV) or a sole proprietorship (EVS)?

Roughly speaking, it depends on whether you anticipate a turnover of more than DKK 50,000 per year.

– In PMV, you cannot have more than DKK 50,000 in revenue per year, and you cannot register your business for VAT or hire employees.

– Once you find that you exceed this amount of revenue, you will have to change your form of business to EVS by reporting it to the authority.

– You can exceed DKK 50,000 in revenue in EVS, and only after you exceed this amount you must register the company for VAT (you can earlier if you find it beneficial to your business).

These are the main differences that should determine your decision when choosing the right form of business for you.

Information about PMV Information about EVS
One owner One owner
You can’t hire employees You can hire employees
Income up to DKK 50,000 per year No restriction on income
Personal and unlimited liability of the owner for the obligations of the company Personal and unlimited liability of the owner for the obligations of the company
Does not pay VAT and other fees Once revenue exceeds DKK 50,000, the company must be registered for VAT
You cannot export/import goods/services from outside the EU You can export/import goods/services from outside the EU
There is no obligation to send an annual report to the Danish Business Authority There is no obligation to send an annual report to the Danish Business Authority
Accounting of income and outgoings and tax settlements is required Accounting of income and outgoings and tax settlements is required
Registration must be renewed after three years Registration does not need to be renewed
Danish CPR number required for business registration Danish CPR number required for business registration
No initial capital required No initial capital required
One person can have one PMV One person can have one EVS
Which form of business to choose: Sole Proprietorship or ApS?

There is a big difference between setting up a sole proprietorship (PMV, EVS) and a limited liability company (ApS).

First, PMV and EVS is a sole proprietorship, while ApS is a company. This means that the owner of a sole proprietorship is personally fully and unlimitedly liable for the company’s obligations, while the owner of an ApS is liable to a limited extent, i.e. only up to the amount of paid-in capital.
As a result, there is much more financial security for the owner in ApS than in EVS. The advantage of EVS instead of ApS is that it is easier to manage the company yourself.
There are several requirements for establishing and operating limited liability companies, including the preparation of annual reports and accounts. In addition, a minimum of DKK 40,000 in equity is required when establishing a limited liability company.
The requirement for start-up capital is what often discourages entrepreneurs from starting this type of business.
Many people decide to start an EVS and during the course of the business save capital to be able to transform their sole proprietorship into an ApS. In this way, you can get limited liability in the long term, which provides the owner with financial security. This is because the owner in a limited liability company is only liable for the amount they contribute to the company. Thus, personal assets, including a house and car, are secured in case of bankruptcy or large claims. In addition, a favorable company structure can be created with a holding company.
Typical questions
Can I run my own business while on welfare?

If you receive cash benefits from the municipality, you cannot start your own business. This also applies to unemployed people receiving unemployment benefits. This is because the unemployment fund and the municipality require you to be ready to work while receiving benefits.

As a self-employed person, do I need insurance?

As a self-employed person, you are not covered by private insurance. Therefore, it would be a good idea to check if there is an insurance policy or two that you need to take out to insure yourself or your possessions, such as your computer or phone. In addition, you should check to see if there are any statutory insurances you need to take out. It depends on what your business does.

What is deductible?

There are various deductions for sole proprietorships that the owner can take advantage of. These are business expenses incurred that allow the business to operate. Such expenditures must be documented. For example, you can get a deduction for the purchase of office furniture, expenses for accountants and lawyers, premises, electricity and heating, as well as telephone, internet and insurance expenses.

What are the requirements for a company name?

The name of a sole proprietorship must be clearly different from other company names. The family name, company name, foundation name, distinctive real estate name, trademark, enterprise characteristics, etc. must also not be used. If the company’s operating activities change, a name change is required. In addition, EVS must not include the designation of a joint stock company (A/S) or a limited liability company (ApS).

Do I need a business account for a sole proprietorship?

There is no requirement for a sole proprietorship to have a business account.

However, it is a good idea to have a separate bank account for the company to separate personal and business finances, which can make it easier to settle VAT. Besides, banks and the Tax Administration recommend having a business account because of the fight against „money laundering” and the increased transparency of transfers between the business and the private part of the business owner.

How to close a sole proprietorship?

A sole proprietorship is closed on the Danish Business Agency/Ehrvervsstyrelsen website. However, there are a number of practical aspects that need to be addressed. Among other things, you need to check when and how you can terminate contracts, orders with contractors, settle obligations, etc. In addition, you need to make sure that you still have access to the company’s digital mailbox, as it is mandatory through TastSelvErhverv to report and pay taxes up to and including the date of closure (if the company is registered for VAT, payroll, excise, etc.).

Our company will be happy to help you set up a sole proprietorship.
All we need is your health insurance card and Danish ID, i.e. a copy of your passport or driver’s license.