Company law

A Danish Private Limited Company (ApS) or Public Limited Company (A/S) is incorporated by preparing and signing a memorandum of association and articles of association, subscribing for the share capital, and appointing the management. An ApS requires a minimum share capital of DKK 20,000, while an A/S requires a minimum share capital of DKK 400,000. The capital contribution must be properly documented.

The company must be registered with the Danish Business Authority no later than two weeks after the memorandum of association has been signed. A register of shareholders must also be established, and ownership information must be registered. If the capital contribution consists of assets other than cash, special requirements apply regarding valuation and documentation.

A holding company is typically a private limited company (ApS) or public limited company (A/S) that owns shares or ownership interests in other companies. It is incorporated in accordance with the general rules of Danish company law, including the preparation of incorporation documents, articles of association, documented share capital, and registration with the Danish Business Authority.

If you already own an operating company personally, a holding company may in certain cases be established through a share-for-share exchange, which may potentially be carried out on a tax-neutral basis. Tax neutrality requires compliance with specific tax law conditions. The structure should therefore be carefully planned before transferring ownership interests.

As your business grows, you should first assess whether all activities should be operated through a single company or divided among several entities. The appropriate structure will depend on factors such as project risk, financing requirements, ownership structure, and future plans for investment or sale.

The company can then be incorporated with the required documentation and registrations, and relevant assets, contracts, and employees can be transferred on an appropriate legal basis. Using multiple companies may separate risks, but it also increases administrative requirements and does not necessarily protect you against obligations you have personally guaranteed.

A private limited company for a restaurant or other operating business is established through incorporation documents, articles of association, documentation of share capital, and registration of management and ownership. The company must have a minimum share capital of DKK 20,000, although the overall financing requirement will often be significantly higher.

In addition, you should assess any regulatory requirements relevant to the specific business, such as food business registrations, alcohol licences, and lawful use of the premises. Lease agreements, employment contracts, and supplier agreements should be entered into by the correct legal entity and coordinated with any required permits and approvals.

In a tax-free share exchange, you generally transfer your shares to a holding company and receive shares in the holding company as consideration. The holding company will normally be required to obtain a majority of the voting rights in the company whose shares are exchanged or increase an existing voting majority.

The exchange may be completed with or without prior approval from the tax authorities, provided the applicable conditions are satisfied. Where approval is not required, a minimum holding period of three years will generally apply. Additional operating companies must be incorporated or restructured separately, and the overall structure should therefore be planned with both legal and tax advice.

The register of shareholders is the company’s record of shareholders and their ownership interests. The articles of association set out the company’s fundamental rules, including its purpose, share capital, management structure, and any restrictions on the transfer of ownership interests.

A shareholders’ agreement, on the other hand, governs the relationship between the parties who have entered into the agreement, such as cooperation, sale of shares, and dispute management. A shareholders’ agreement does not bind the company itself or decisions made by the general meeting. It is therefore important to assess which provisions should also be included in the articles of association.

Changes involving shareholders, directors, or the company structure require different documents and resolutions. For example, a transfer of ownership may require a share transfer agreement and an update of the register of shareholders, while a new director must be appointed by the competent corporate body and registered with the Danish Business Authority.

Changes to the company structure may include capital changes, mergers, or demergers. Before implementing any changes, it is important to clarify the applicable majority requirements, documentation and registration obligations, as well as any tax implications.

A transfer of 50% of the ownership interests requires agreement on the purchase price, payment terms, transfer date, and any warranties or representations. Before proceeding, you should review the articles of association, any shareholders’ agreement, and any applicable consent or pre-emption rights.

Where ownership will be split equally between two shareholders, it is particularly important to agree in advance on how deadlock situations will be resolved. A shareholders’ agreement should regulate matters such as management, work contributions, financing obligations, and exit mechanisms. Following completion, the register of shareholders and relevant ownership registrations must be updated.

The applicable rules depend on the legal form of the business, the ownership group, and the chosen structure. In a Danish private or public limited company, the register of shareholders must be maintained correctly, and both legal and beneficial owners must be registered. Beneficial owners are the natural persons who ultimately own or control the business.

The ownership structure should be reflected in the company’s articles of association, shareholders’ agreements, and relevant corporate resolutions. It is also important to consider voting rights, tax implications, financing arrangements, sector-specific regulations, and any rules governing foreign investments.

You should first determine whether the change was implemented through a transfer of shares, a capital increase, or another mechanism. Your rights will depend on the articles of association, the shareholders’ agreement, and the relevant provisions of the Danish Companies Act relating to notices, subscription rights, and protection against unfair advantages.

A breach of a shareholders’ agreement does not automatically invalidate a corporate resolution but may give rise to claims against the parties in breach of the agreement. You should act quickly and secure relevant evidence, as short limitation periods may apply to challenges against shareholder resolutions.

The value of a minority shareholding depends on the company’s financial position, future prospects, and the rights attached to the shares. The articles of association or any shareholders’ agreement may contain a binding valuation mechanism or procedures for resolving disputes regarding valuation. Danish law does not automatically apply a specific minority discount.

Arbitration requires a contractual basis. Before commencing proceedings, you should carefully assess the value of the claim, available evidence, costs, and the likelihood of recovery. In some cases, negotiation may be a more practical and cost-effective solution.

A sole proprietorship may be converted into a private limited company either through a taxable conversion or, if the conditions are met, a tax-free business conversion. This is not merely a change of business name but a transfer of the business to a new legal entity with its own company registration number.

Among other things, consideration must be given to the valuation of assets, liabilities, contracts, and employees, and the necessary incorporation documents must be prepared. A tax-free conversion is subject to specific statutory requirements and deadlines. The conversion does not automatically release you from personal liability to existing creditors.

Where a company owns real estate, it may be beneficial to separate the property from operating activities or establish a holding company structure. Depending on the existing structure and objectives, options may include a share-for-share exchange, a demerger, or a transfer of assets.

Any restructuring should only be carried out following a comprehensive assessment of tax consequences, registration duties, financing arrangements, creditor interests, and consent requirements. Establishing a holding company does not, in itself, transfer ownership of property already held by an operating company.

A transfer of ownership in a Danish private limited company should begin with a review of the articles of association, any shareholders’ agreement, and any pledges over the ownership interests. A transfer agreement should then be prepared, setting out the shares being transferred, the purchase price, payment terms, completion date, and any warranties and representations.

Any required consents and pre-emption rights must be addressed before completion. The company must be notified of the transfer, the register of shareholders must be updated, and the registration of legal and beneficial owners must be amended if the transaction triggers reporting obligations.

A convertible loan gives an investor the right to convert the loan into equity under agreed terms and conditions. The documentation should address, among other things, the loan amount, interest rate, maturity date, conversion price, triggering events, and the investor’s rights if conversion does not occur.

The company must also ensure that the issuance and any related capital increase are validly approved under applicable corporate law requirements, potentially based on a valid board or shareholder authorization. The terms must be properly documented and registered in accordance with the Danish Companies Act. A loan agreement alone may therefore not be sufficient.

A solvent company may be wound up through voluntary liquidation if the owners wish to close the business. If all liabilities have been paid, dissolution by means of a shareholder declaration may, in certain circumstances, be an alternative. In such cases, the shareholders assume joint, personal, and unlimited liability for any debts existing at the time of the declaration.

Compulsory dissolution may become relevant if the company fails to comply with statutory requirements, such as filing annual reports or maintaining a lawful management structure. If the company is unable to meet its financial obligations and the payment difficulties are not merely temporary, the possibilities of restructuring or bankruptcy should be considered.

If the company has been subjected to compulsory dissolution, you should immediately contact the probate court and any appointed liquidator. Reinstatement may be possible if the statutory requirements are met and the application is submitted within the applicable deadline. However, the company may be dissolved before reinstatement can be completed.

In the event of bankruptcy, you are required to cooperate with the bankruptcy trustee and provide accounting records, agreements, and information regarding assets and transactions. You may not continue to dispose of assets belonging to the bankruptcy estate.

If the company is able to satisfy all of its liabilities, the shareholders may resolve to commence a voluntary liquidation and appoint a liquidator. The resolution must be registered, and creditors are granted a three-month period in which to submit claims.

The liquidator must, among other things, settle tax matters, pay outstanding liabilities, and prepare the final liquidation accounts before the company is dissolved and any surplus is distributed. The fact that only cash remains does not necessarily mean that all obligations have been discharged. Dissolution by shareholder declaration may be an alternative but involves personal liability for shareholders in respect of existing debts.

Foreign owners may require assistance with selecting an appropriate legal structure, incorporating or acquiring a company, documenting the ownership chain, and registering legal and beneficial owners. Assistance may also be needed in relation to management structure, signing authority, digital access solutions, and Danish accounting and tax obligations.

For investments in certain sectors, foreign direct investment screening rules and any required governmental approvals should be assessed before completion. Corporate documentation should also address language requirements, governing law, and cross-border enforcement issues.