Until March 1st 2011 the subscribed capital and premium, if relevant, should be paid up to the company in full upon registration of a limited company in Denmark. The reasoning behind this rule was that the company should have a minimum capital that creditors could seek fulfilment in. The minimum amount of nominal paid-up capital depends on the type of limited company, and ranged from DKK 40,000 (ApS) to DKK 400,000 (A/S). (For a while it could be a low a DKK 1 (IVS), but this possibility no longer exists).
On March 1st 2011 this rule was amended, allowing
registration of limited companies with only 25% of the
subscribed nominal capital (minimum payment of DKK 40,000)
and from 2013 the same rule has been in force for capital
increases, allowing shareholders to pay up only 25% of the
subscribed nominal capital.
If shares are subscribed at a premium, the premium must always be paid in full.
If the shareholder does not pay the capital of subscribed shares in full, a payment obligation arises, meaning the limited company receives a claim on the shareholder for the remaining payment. The claim becomes due on demand with two weeks' notice.
For instance, upon registration of an A/S with a subscribed nominal capital of DKK 400,000 the shareholder needs only to pay up DKK 100,000. The remaining DKK 300,000 is owed to the limited company by the shareholder.
In Danish law, The Company Act imposes an obligation on the management (managing director and/or the board of directors) to ensure sound management of capital resources at all times. The management is also obligated to ensure that claims against the shareholder are not time-barred by the statute of limitations.
Obligations for partially paid shares are time-barred by the statute of limitations three years from the point in time the limited company demands the claim paid. The statute of limitations of three years for partially paid share does not begin until the limited company demands the claim paid in full. However, even if payment has not been demanded, the three year limitation period begins at the latest 10 years after the registration of the company or the capital increase.
It is therefore of great importance that the management are aware that claims for partially paid shares will be time-barred by the statute of limitations at the latest 13 years after the subscription of the shares. Alternatively, if the management has demanded the partially paid shares paid up within 10 years after subscription, the statute of limitations is three years from the time of decision.
The management can be liable to the company for losses if the payment obligations are time-barred.
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.