Branch of a
			Public Limited 	Private Limited foreign com- 		
			Company (A/S) 	Company (ApS) 	pany (filial)

Founders/formation:- 

Minimum number 		1 			1 		_
Resident in Denmark 	yes, > 50% (1) 		1 (1)		_
Formation agreement 	yes			yes 		_
Registration 		yes (2) 		yes (3) 	yes, upon
								application
Articles of association yes			yes 		yes (4)

Shareholders:-

Minimum number 		1 			1 		_
Resident in Denmark 	no			no 		_	
Disclosure in the 
annual accounts of 
major shareholdings 	yes (5) 		yes (6) 	_
Information to the 
company of major	yes, within		yes, within 	_
shareholdings 		4 weeks			4 weeks (7)
Loans to shareholders 
allowed	 		no (8) 			no (8) 		_ 
Compulsory redemption 
of minor shareholders 	yes (9) 		yes (9) 	_ 

Board of Directors:-

Minimum number 		3 (10)	 		_ (11) 		_ 
Employee representation yes (12)		yes (13) 	_ 
Resident in Denmark 	yes,>50% (1)		yes,>50% (1) 	_

General Management:- 

Minimum number 		1 			1 		1 (14)
Resident in Denmark 	yes,>50% (1) 		yes,>50% (1) 	yes (1)


Shares:-

Own shares allowed 	yes (15) 		no 		_ 
Limitation in 
voting rights		yes (16) 		no (17)		_ 
Shares issued at 
a premium 		yes 			yes 		_ 
Shares issued at 
a discount 		no 			no 		_ 
Bonus shares 		yes 			yes 		_

Share capital:-

Minimum 		DKK (18) 		DKK (18) 	_ 
	 		500,000		 	200,000
Recapitalisation	no 			yes (19) 	_ 
Share capital reduction, 
notice to creditors 	yes (20) 		yes (20) 	_ 
Share capital increase 
pay 			yes (21) 		yes (21) 	_ 
Auditors statement on 
share capital increase 
other than by cash 	yes 			yes 		_ 
Shareholders redemption 
right			yes (22) 		yes (22) 	_

Dividends:- 

Limitations on 
dividends 		yes (23) 		yes (23) 	_ 
Dividends on account 	no (24)			no (24) 	_

Audit:-

Statutory audit		yes			yes 		no (25)
State authorised public 
accountant or registered 
accountant		yes 			yes		yes (25)

Annual accounts:-

Annual accounts		yes (26) 		yes (26) 	no (27)
Group accounts 		yes (28) 		yes (28) 	no (27)
Publication 		yes (29) 		yes (29) 	no (29)

1. The Minister of Industry may exempt from this requirement upon application. General exemption has been granted to EC citizens.

2. Application for registration must be made within 6 months after signing the formation agreement. The company can only be registered provided that the subscribed share capital equals the share capital stated in the Articles of Association and the subscribed share capital plus any premium amounting to at least DKK 500,000 are paid up.

3. Application for registration must be made within 8 weeks after the signing of the formation agreement. The company can only be registered provided that the subscribed share capital equals the share capital stated in the Articles of Association and the subscribed share capital and any share premium amounting to at least DKK 200,000 are paid up.

4. A copy of the company's Articles of Association must be filed upon application for registration. An authorised Danish translation may be requested.

5. Applicable for shareholders holding more than 5% (or multiples of 5%) of the share capital amounting to at least DKK 100,000.

6. Applicable to shareholders holding more than 10% (or multiples of 5%) of the share capital amounting to at least DKK 100,000, provided that the company's share capital exceeds DKK 300,000.

7. Only applicable to companies with a share capital of more than DKK 300,000.

8. A company is not allowed to grant loans or guarantees to individual shareholders or members of the Board of Directors or the General Management.

9. A parent company holding more than 90% of the shares in a company can require compulsory redemption of the remaining shareholders.

10. The majority of the members of the Board of Directors may not be executive directors of the company.

11. If the share capital is less than DKK 300,000, the Articles of Association can state that there should be no Board of Directors. If the share capital exceeds DKK 300,000, no more than 50% of the Board of Directors may be executive directors of the company.

12. In companies with more than 35 full time employees for 3 consecutive years, the employees have the right to elect half as many representatives to the Board of Directors as are elected by the shareholders with a minimum of two.

13. In companies with more than 35 full time employees for 3 consecutive years, and a share capital of more than DKK 300,000, the employees have the right to elect half as many representatives to the Board of Directors as are elected by the shareholders with a minimum of two.

14. A branch of a foreign company must have at least one branch manager. The requirements for a branch manager are identical to the requirements for a General Manager of a company.

15. The maximum holding of own shares allowed is 10% of the total nominal value of the share capital, provided that the remaining share capital exceeds DKK 500,000.

16. All shares must have a voting right. The articles of association may state that shares can have voting rights up to a maximum of ten times the voting rights of other shares.

17. Shares have voting rights according to the value of the share; however, the articles of association can state that the voting rights are different.

18. The minimum share capital for public limited companies registered before 6 December 1991 is DKK 300,000 (private limited companies: DKK 80,000). Before 1 January 1997, the share capital must be increased to DKK 500,000 for public limited companies and DKK 200,000 for private limited companies.

19. A private limited company must be recapitalised if more than 50% of the share capital is lost.

20. If the share capital is reduced for other purposes than to cover losses, a notice to creditors must be given 3 months before the share capital reduction. After the share capital reduction, the minimum share capital requirements must be fulfilled.

21. A share capital increase cannot be registered until the total amount of the increase and any share premium are paid up.

22. At the annual general meeting, a decision can be made to depart from the rule that shareholders have a right of redemption.

23. Dividends to be declared are limited to unrestricted reserves and cannot exceed a justifiable level with due regard to the financial position of the company (and the group).

24. Dividends can only be declared at the annual general meeting.

25. There is no Act requiring a statutory audit; however, when granting permission to establish a branch, the Minister of Industry may require that the accounts are audited.

26. Information to be provided in the notes to the annual accounts and group accounts includes:
  • a. Accounting policies.
  • b. Name, address and share of ownership of subsidiaries and associated companies in which at least 20% of the shares are held. This information may be omitted if such disclosure can be detrimental to the company or the subsidiary or associated company. Such omission must be disclosed.
  • c. Movements on fixed assets and related depreciation.
  • d. Details of share capital, including number of shares, par value and classes of shares with different voting rights.
  • e. Details of convertible bonds or other securities issued.
  • f. Long-term debts which fall due after more than five years.
  • g. Details of assets pledged as security.
  • h. Details of discounted bills, pension, guarantee and other commitments to the extent that they are not included in the balance sheet.
  • i. Details of rental and lease commitments.
  • j. Details of loans and guarantees furnished to general managers, directors and shareholders of the company or its parent company. Such loans cannot legally be granted subsequent to 18 June 1982.
  • k. The official valuation for property tax purposes of real property.
  • l. Disclosure of the fact that work in progress for third parties includes a pro portion of the estimated profit relating to work which is not completed at the balance sheet date, including a statement of the valuation methods applied.
  • m. Net turnover broken down by activities and geographical markets (this information may be omitted if such disclosure could be detrimental to the company).
  • n. Income taxes paid during the accounting year.
  • o. To what extent provision for tax on profit for the year is influenced by extraordinary taxableincome or losses.
  • p. The amount of deferred income tax if this is not provided for in the balance sheet.
  • q. If a tax liability would arise on the possible future sale of fixed assets and the company has not provided for this contingency in the balance sheet, then the amount must be stated.
  • r. The average number of employees and details of total remuneration paid to employees, directors and general management.
  • s. Listed companies and large companies must disclose audit fees and other fees paid to the auditors regarding the accounting year.
  • t. Details of own shares.
  • u. Details of movements on shareholders equity during the year.
  • v. Name and address of the parent undertakings including foreign parent undertakings, which present group accounts for the immediate and ultimate group in which the company is a subsidiary and where the group accounts etc. for the foreign parent undertaking can be obtained.
A company, either public or private, which does not exceed two of the following limits, for two consecutive years, is exempted from the full filing requirements and may omit the information detailed in items e, k and n and part of the information detailed in f and g above. Furthermore, the filing of the annual report of the directors may also be omitted:
  • Total assets of less than DKK 12,000,000.
  • Net turnover of less than DKK 24,000,000.
  • Less than fifty employees.

Public and private companies which do not exceed two of the three criteria mentioned below, in two consecutive years, may omit disclosure of sales and cost of sales in the profit and loss account, if such disclosure would be detrimental to the company for competitive reasons:
  • Total assets of DKK 50,000,000.
  • Net turnover of DKK 100,000,000.
  • 250 employees.

27. Statutory accounts and group accounts are not required; however, an approved copy of the foreign company's audited accounts must be filed with the Danish companies registry.

28. A parent company must prepare group accounts unless the company is a subsidiary of a parent company resident in the EC and the company is not listed on the stock exchange.

29. The annual accounts must be filed with the Danish companies registry no later than 6 months after the close of the financial year, and no later than one month after approval at the annual general meeting. Accounts filed with the Danish companies registry are available to the general public.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For further information contact Carsten Norringgaard or Bjarne Lykkegaard Hansen on +45 38 18 30 00.