Corporate Law at Denmark
Sure! Here’s a concise overview of Corporate Law in Denmark:
Corporate Law in Denmark
1. Legal Framework
Corporate law in Denmark is primarily regulated by:
The Danish Companies Act (Selskabsloven) — governs company formation, management, and dissolution.
The Danish Business Authority (Erhvervsstyrelsen) oversees company registration and compliance.
Other relevant legislation: Financial statements, securities law, insolvency law.
Denmark is an EU member, so EU directives also influence corporate regulations.
2. Types of Business Entities
| Type of Company | Danish Name | Key Characteristics |
|---|---|---|
| Private Limited Company | Anpartsselskab (ApS) | Popular for SMEs; minimum share capital DKK 40,000. |
| Public Limited Company | Aktieselskab (A/S) | Suitable for larger companies; minimum share capital DKK 400,000. |
| Sole Proprietorship | Enkeltmandsvirksomhed | Owned by one person; unlimited liability. |
| Partnerships | Interessentskab (I/S) | General partnership with joint liability. |
| Limited Partnership | Kommanditselskab (K/S) | Includes general and limited partners. |
3. Company Formation
Key steps:
Choose company type and name.
Draft Articles of Association.
Deposit share capital in a Danish bank.
Register with the Danish Business Authority (Erhvervsstyrelsen).
Obtain a CVR number (company registration number).
Register for VAT (if applicable).
Comply with employment and tax registrations.
4. Corporate Governance
Private Limited Company (ApS): Managed by one or more directors; a board of directors is optional unless specified.
Public Limited Company (A/S): Must have a board of directors and an executive management. A general meeting of shareholders is required.
Shareholders hold the ultimate control via general meetings.
Directors owe fiduciary duties and can be held liable for breaches.
5. Capital Requirements
ApS: Minimum share capital of DKK 40,000.
A/S: Minimum share capital of DKK 400,000.
Share capital can be paid in cash or in kind.
6. Taxation
Corporate income tax: 22% (2025 rate).
Dividend withholding tax: Generally 27%, reduced under tax treaties or EU directives.
VAT: Standard rate 25%.
7. Employment Law
Danish companies must comply with Danish labor laws and collective agreements.
Strong employee protections and flexible labor market (“flexicurity” model).
8. Insolvency
Governed by the Danish Bankruptcy Act.
Directors must file for bankruptcy if the company is insolvent or illiquid.
Restructuring options are available under certain conditions.
9. Foreign Investment
No restrictions on foreign ownership.
Foreign investors can fully own Danish companies.
EU/EEA nationals have equal rights.
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