Compulsory dissolution under the Companies Act – what should you know?

The Danish Business Authority has the right to request the bankruptcy court to dissolve a limited liability company if the company does not comply with its obligations under the Companies Act. This can be done in accordance with Section 225 of the Companies Act. The purpose is to protect creditors and ensure that companies comply with the legal requirements set out in the Companies Act. But what is the process for compulsory dissolution of companies, and how can it be avoided?

What can Trigger Compulsory Dissolution?

According to section 225(1) of the Danish Companies Act, the Danish Business Authority may request the bankruptcy court to compulsorily dissolve a company if one of the following conditions applies:

1. An approved annual report has not been submitted on time.
2. The company does not have management or a registered office in accordance with legislation or the articles of association.
3. Failure to register shareholders with significant capital interests or failure to register that the company does not have such shareholders.
4. The company has not registered beneficial owners, or the registration is incomplete.
5. Information or documentation about beneficial owners is incomplete.
6. Company documents have not been stored correctly or are incomplete.
7. Failure to report in accordance with the certificate of registration of the company five years after the date of registration.
8. Failure to comply with the Danish Business Authority’s requirement to obtain an independent statement from an auditor, lawyer, or other expert regarding the accuracy of certain information.
9. No auditor has been appointed, even though the company is subject to mandatory auditing.
10. No auditor has been appointed, even though the general meeting has decided that the company’s annual accounts must be audited.
11. The company’s management has not responded to demands for payment of share capital, which it appears cannot be met.

There are thus a number of circumstances that may trigger the compulsory dissolution of a company in the event of non-compliance with its obligations.

Further Grounds for Dissolution

The Danish Business Authority may also request dissolution pursuant to section 162 a of the Danish Financial Statements Act if the company:

• Fails to submit a statement pursuant to section 159 d,
• Fails to submit information pursuant to section 160, or
• Fails to comply with an order issued pursuant to section 161(1)(ii) or (iii).

If it is a branch of a foreign company, the Danish Business Authority may delete the branch from the register. The same applies to partnerships and limited partnerships if they do not meet the requirements.

Notification

Before the Danish Business Authority takes action, the company will typically receive a notification sent to the company’s digital mailbox. The warning often has a deadline of approximately four weeks, during which the company can correct the errors found. If the deadline is not met, the Authority may decide to dissolve the company.

What Happens in Practice?

When the Danish Business Authority requests the bankruptcy court to dissolve a company, two scenarios may arise:

• Solvent dissolution (liquidation): If the company has sufficient assets to cover costs and creditors, a liquidator is appointed to wind up the company by realizing assets and distributing any remaining funds to the owners.
• Insolvent dissolution (bankruptcy): If the company cannot pay its creditors, it goes into bankruptcy proceedings, and a trustee takes over the liquidation.

Resumption of the Company

In certain cases, it is possible to resume the company if certain conditions are met. You can read more about resumption here.

Prevention

It is possible to prevent a future compulsory dissolution based on the above. You should therefore ensure the following on an ongoing basis:

• Timely submission of annual reports.
• Registration and updating of management, registered office, and owners.
• Compliance with any audit requirements.
• Correct handling of company documents and capital.
• Checking the company’s digital mailbox for mail from public authorities.

It may be a good idea to consult a professional as soon as possible if you are facing a possible compulsory dissolution in order to avoid missing deadlines and to keep track of important documents.

This article does not constitute and cannot replace legal advice. Raadgiver.dk ApS assumes no liability for any damage or loss, directly or indirectly, attributable to the use of the information provided in the article.

Published January 2026