NOTE: New rules have come into force since the preparation of the article below. Read more about these by clicking here.
New law requires re-registration of entrepreneurial companies.
Read on and see what you need to be aware of.
Briefly about the abolition of the entrepreneurial company (IVS)
Back in April, the entrepreneurial company (IVS) was abolished. This meant that it is no longer possible to establish an entrepreneurial company. This means that there must be a re-registration of existing entrepreneurial companies before 15 April 2021. If this does not happen, the entrepreneurial company may end up being sent for compulsory dissolution. We have written a little more about the abolition of the entrepreneurial company in the post: Entrepreneur company (IVS) has now been abolished.
What it requires when re-registering entrepreneurial companies
In order for your entrepreneurial company to be re-registered, it is required that the entrepreneurial company meets the capital requirements for the type of company to which it is to be re-registered.
The most classic scenario is that it is decided that the entrepreneurial company must be re-registered as a private limited company (ApS).
At the time of writing, the minimum requirement for the share capital in a private limited company is DKK 40,000. If you wish to re-register as a private limited company, this means that the share capital must amount to a minimum of DKK 40,000 in order for the re-registration to take place.
At the same time, it is a requirement that all other conditions for the existence of a private limited company are met. This means that the articles of association must be adapted so that they meet the minimum requirements for a private limited company.
There must also be a statement from an appraiser (typically an accountant) that the share capital is present. In some cases, a management statement may be sufficient – but start from the fact that you must include an auditor’s statement when calculating what it will cost you to re-register. Then you can only be pleasantly surprised.
All of this must be discussed at the company’s general meeting and, of course, must be validly adopted there.
Have your articles of association checked now that the process is underway anyway
However, now that this exercise is carried out, it is natural to have the articles of association checked to see if there are elements in or around the company’s operations that must be taken into account in the articles of association.
A classic pitfall is that the articles of association are not checked in parallel with the company’s development.
Many entrepreneurs and business owners see articles of association as something that needs to be drafted once and for all throughout the life of the business.
This can be a big mistake.
In the vast majority of cases, it will be a good idea to have them reviewed when you get assistance with the re-registration process anyway.
At Raadgiver.dk, a review of the articles of association (in addition to the mandatory changes) is a regular part of the re-registration process, which you do not pay extra for with us. In this way, you are sure that your articles of association match the needs and requirements that your company faces.
This can happen if you do not re-register your entrepreneurial company
As mentioned, all entrepreneurial companies must actively ensure that they are re-registered before 15 April 2021.
If this does not happen, it can have fatal consequences for the company.
It can end up with the entrepreneurial company being sent for forced dissolution. If this happens – and is not taken care of until late in the process – it can be an expensive pleasure. In the worst case, the consequence could be that the company is dissolved.
So the message is: make sure to get your entrepreneurial company re-registered well in advance if you want the company to continue operating.
It pays off.
Contact a specialist
If you have questions about the re-registration of entrepreneurial companies, you are more than welcome to contact us.
