New bill adopted: Better opportunity for re-registration of entrepreneurial companies (IVS)

New Rules on Re-registration of Entrepreneurial Companies (IVS) Adopted by the Danish Parliament

On 17 December 2020, the Danish Parliament adopted new rules for the re-registration of entrepreneurial companies, which make it cheaper and easier to re-register entrepreneurial companies (IVS) as private limited companies. In addition, the new rules also include an extension of the deadline for when re-registration of entrepreneurial companies (IVS) must take place at the latest.

In a previous article, we have told a little about the abolition of the entrepreneurial company.
You can read more about that here.

Below we briefly outline what the new rules on re-registration of entrepreneurial companies mean for you as an owner of an entrepreneurial company (IVS).

Re-registration Can Now Take Place by Contributing Residual Capital

Back in the spring of 2019, it was decided in the Danish Parliament that entrepreneurial companies should be abolished. Thus, an expiry date was set for the existence of entrepreneurial companies, as well as a deadline was set for when re-registration of entrepreneurial companies should take place at the latest. We wrote a little about the previous rules back in 2019, and you can read more about them here.

The new rules allow for re-registration to take place by paying up the remaining capital in accordance with the rules of the Danish Companies Act on capital increase. The remaining capital is the difference between the registered share capital registered for your entrepreneurial company (IVS) and the minimum requirement for private limited companies’ (ApS) share capital, which at the time of writing amounts to DKK 40,000.

Specifically, for you as an owner of an entrepreneurial company (IVS), this means that you can avoid having to prepare a valuation statement in connection with the re-registration, and that the re-registration must take place through a so-called capital increase, which means that the company’s registered capital is increased to the minimum requirement for private limited companies’ share capital.

The re-registration has thus only taken place when the entrepreneurial company has made a decision at the general meeting to re-register and that the payment of residual capital is made, as well as that the articles of association are updated and that all these matters are registered with the Danish Business Authority.

Deadline Extension

In addition to the good news regarding easier re-registration of entrepreneurial companies, there is also another good news:

The deadline for re-registration of entrepreneurial companies (IVS) has been extended by 6 months. The deadline for the re-registration has therefore now been moved to 15 October 2021. If the re-registration does not take place within this deadline, it may ultimately result in the Danish Business Authority sending your entrepreneurial company (IVS) for compulsory dissolution by the bankruptcy court.

Legal Assistance Regarding Re-registration of IVS May Still Be a Good Idea

In connection with the re-registration of your entrepreneurial company, it is still a good idea to have your company documents reviewed to ensure that they comply with applicable rules and that they are adapted and ready for the company’s operations now and in the future. Remember that the company documents are your company’s legal foundation, and that the company’s strategies should therefore also be taken into account in this.