Creating a New Limited Liability Company in Denmark (APS)

To register a new limited liability company in Denmark (ApS), it's necessary to register it with the Danish Enterprise Authority (Erhvervsstyrelsen). The registration process requires a minimum paid-up share capital of DKK 20,000.

YOU CAN USE THE DEPOSITED SHARE CAPITAL FOR COMPANY EXPENSES

The share capital that is deposited in a new ApS company belongs to the company and not its owners. The equity can be utilized by the company for expenses, salaries, and dividends.

DO NOT BORROW MONEY FROM THE COMPANY IF YOU ARE THE OWNER

While it may not be technically illegal, it is generally not recommended for company owners to borrow money from the company. This is because the taxation associated with it is usually very unfavorable.

MANAGEMENT

A Danish LLC can have one or multiple directors, and there is no restriction on the owners also serving as directors. The directors can be either residents or non-residents of Denmark.

OWNERS

An ApS company in Denmark can have one or more owners, and the directors of the company can also be owners. The owners can be either residents or non-residents of Denmark.

REQUIREMENTS AND MINIMUM SHARE CAPITAL FOR AN APS

To establish a private limited liability company in Denmark (ApS), you must meet specific legal requirements regarding share capital, ownership and company structure. Understanding these rules before you start will help you avoid delays and unnecessary costs during registration.

Minimum share capital for an ApS

The minimum share capital for a Danish ApS is DKK 40,000. This capital can be contributed in cash, as non-cash assets (contribution in kind), or as a combination of both, provided that the total value meets or exceeds the statutory minimum.

The share capital must be fully subscribed at the time of incorporation. You cannot register an ApS with a promise to pay the capital later – it must be paid or validly contributed when the company is founded.

Cash contribution vs. contribution in kind

Most new ApS companies are founded with a cash contribution. In this case, the founders deposit at least DKK 40,000 into a bank account or a client account, and the bank or lawyer issues documentation confirming the deposit.

If you contribute assets instead of cash (for example equipment, intellectual property or an existing business), the following conditions apply:

• The assets must have a determinable and reliable value at the time of incorporation
• Normally, an independent valuation report from a state-authorised or registered public accountant is required
• The valuation must confirm that the contributed assets at least equal the nominal share capital

Intangible assets such as know-how or future services cannot normally be used as valid contribution in kind unless they meet strict valuation and documentation requirements.

Proof and documentation of share capital

When registering the ApS with the Danish Business Authority, you must be able to document that the share capital is available to the company. Typically, this is done by:

• A bank confirmation showing the deposited amount, or
• A lawyer’s or accountant’s declaration confirming that the capital has been paid, or
• A valuation report for contributions in kind

The documentation is not always submitted as a public document, but you must be able to present it to the authorities on request and keep it with the company’s records.

Currency and division of share capital

The share capital of an ApS is usually denominated in Danish kroner (DKK), but it can also be denominated in certain foreign currencies, such as EUR, under specific conditions. The capital is divided into shares (quotas), which can have different nominal values and classes if you wish to create different rights for different owners.

You must state in the articles of association:

• The total nominal share capital
• The currency of the capital
• Whether there are different share classes and what rights they carry

Number of owners and residency requirements

A Danish ApS can be founded by one or more owners, either individuals or legal entities. There is no requirement that the owners are Danish residents or Danish citizens. Both Danish and foreign owners can hold 100% of the shares.

There is no general requirement for a Danish-resident shareholder. However, other rules (for example regarding management or tax residency) may affect the practical setup and tax consequences of the ownership structure.

Management structure and liability

An ApS must have at least one management body. You can choose between:

• A board of directors and an executive board, or
• Only an executive board

There is no requirement that managers or directors are Danish citizens, but certain rules on residence within the EU/EEA and on registration of foreign addresses apply. Management is responsible for ensuring that the company always meets the capital requirements and that the company is solvent.

The liability of the owners is limited to the amount of the share capital and any additional agreed contributions. Owners are not personally liable for the company’s debts, unless they have provided personal guarantees or acted in a way that triggers personal liability under Danish law.

Ongoing capital requirements and capital loss

After incorporation, the company is not required to maintain a specific minimum equity level at all times, but the management has a duty to react if the company’s equity is significantly reduced.

If the company’s equity is less than half of the registered share capital, the management must, as a rule:

• Prepare a balance sheet showing the company’s financial position
• Present the situation to the owners
• Consider measures such as capital increase, cost reductions, restructuring or, in serious cases, liquidation

Ignoring a serious capital loss can lead to personal liability for management and, in extreme cases, disqualification from acting as a director in Danish companies.

Increasing or reducing share capital

During the lifetime of the ApS, the owners can decide to change the share capital:

• Capital increase can be made by new cash contributions, contributions in kind or by converting reserves into share capital
• Capital reduction can be made to cover losses or to pay out excess capital to the owners, subject to creditor protection rules and registration with the Danish Business Authority

Any change in share capital must be decided by the general meeting, documented in minutes, reflected in updated articles of association and registered with the authorities within the applicable deadlines.

Meeting the statutory requirements and correctly documenting the minimum share capital are essential steps in creating a Danish ApS. Proper planning at this stage makes later processes such as banking, tax registration and dividend distribution significantly smoother.

STEP-BY-STEP REGISTRATION PROCESS WITH THE DANISH BUSINESS AUTHORITY (ERHVERVSSTYRELSEN)

The registration of a Danish private limited liability company (ApS) is handled fully online through the Danish Business Authority (Erhvervsstyrelsen) via the Virk.dk portal. Below is a practical, step‑by‑step overview of the process, from preparing your documents to receiving your CVR number.

1. Prepare the basic information and documents

Before you start the online registration, you should have the following ready:

• Proposed company name and alternative name(s) in case the first choice is taken
• Registered office address in Denmark (a physical address, not a PO box)
• Information about owners (shareholders) and management (executive board and, if relevant, board of directors)
• Amount of share capital (minimum DKK 40,000 for an ApS) and how it will be paid in (cash or non‑cash contribution)
• Draft articles of association and founding (incorporation) document
• Copy of ID and address documentation for foreign owners and management, if applicable

If you use a Danish accountant or corporate service provider, they can usually prepare all documents and handle the filing on your behalf.

2. Decide how to sign and file: NemID/MitID or representative

To register an ApS directly on Virk.dk, at least one founder or authorised representative must be able to sign digitally with NemID/MitID (for individuals) or MitID Erhverv (for companies). If the owners or directors do not have Danish e‑ID, you can:

• Grant a Danish adviser (for example, your accountant or lawyer) a power of attorney to sign and submit the registration, or
• Use a formation agent that provides a turnkey ApS and handles all communication with Erhvervsstyrelsen.

3. Deposit the share capital

Before or in connection with registration, the share capital must be paid in. For most new ApS companies this is done in cash:

• Open a temporary capital deposit account with a Danish bank or deposit the capital to a client account of your lawyer or accountant
• Pay in at least DKK 40,000 (or a higher amount if you choose)
• Obtain documentation from the bank or adviser confirming that the capital has been deposited

If you contribute non‑cash assets (for example, equipment or intellectual property), a valuation report prepared by a state‑authorised or registered public accountant is required and must be attached to the registration.

4. Draft the founding document and articles of association

The founding document (stiftelsesdokument) and the articles of association (vedtægter) are mandatory and must at least include:

• Company name and registered office municipality in Denmark
• Company purpose
• Share capital amount and division into shares
• Rules on management structure (executive board and, if relevant, board of directors)
• Financial year (for example, 1 January – 31 December)
• Any transfer restrictions on shares and rules for general meetings

These documents are signed by the founders and uploaded as part of the online registration.

5. Complete the online registration on Virk.dk

The actual registration is done via the form for creating a new company (ApS) on Virk.dk under the Danish Business Authority’s self‑service solutions. During the process you will:

• Enter the company name and address
• Provide information about the share capital and date of foundation
• Register owners and management, including CPR/CVR numbers or foreign identification details
• Upload the signed founding document, articles of association and documentation for the paid‑in capital
• Indicate whether the company will be subject to audit or exempt (depending on size and accounting class)

The registration fee to Erhvervsstyrelsen is paid online as part of the filing process. The fee is fixed and must be paid before the application is processed.

6. Processing time and receipt of CVR number

Once the application is submitted and the fee is paid, the Danish Business Authority reviews the registration. If all information is correct and the documentation is sufficient, the company is usually registered within a few working days. The company receives a unique CVR number (Central Business Register number), which serves as its official identification in Denmark.

The registration certificate can be downloaded from the Central Business Register (CVR) and will show the company’s name, CVR number, address, management, share capital and financial year.

7. Register for VAT, payroll and other schemes

After the ApS has obtained its CVR number, you can register for:

• VAT (moms), if the company’s taxable turnover is expected to exceed DKK 50,000 over a 12‑month period
• Employer obligations, if the company will have employees (A‑tax, labour market contributions and ATP)
• Other relevant schemes, such as import/export registrations or excise duties, depending on the business activity

These registrations are also done via Virk.dk and are essential to ensure correct tax and reporting from the start.

8. Register beneficial owners (UBO)

All Danish companies, including ApS, must register their beneficial owners (UBO) with Erhvervsstyrelsen. Beneficial owners are the individuals who ultimately own or control the company, typically those holding more than 25% of the shares or voting rights or otherwise exercising control.

The UBO registration is usually done immediately after the company is created and can be completed online using the CVR number. Failure to register beneficial owners can lead to enforcement measures and fines.

9. Open the permanent business bank account

Once the ApS is registered and has a CVR number, you can convert the temporary capital deposit account into a regular business account or open a new business account with a Danish bank. The bank will carry out its own customer due diligence under anti‑money laundering rules and will typically request:

• Registration certificate and articles of association
• Identification and address documentation for owners and management
• Information about the company’s expected activities, turnover and origin of funds

After the business account is opened, the deposited share capital is transferred to the company’s disposal and can be used for business expenses.

10. Keep company information up to date

After incorporation, any changes to the company’s name, address, management, share capital or articles of association must be registered with Erhvervsstyrelsen via Virk.dk. Many changes require shareholder approval and updated documents, and some also trigger a registration fee.

Keeping the company’s data in the Central Business Register accurate and up to date is a legal obligation and helps avoid penalties and practical problems with banks, suppliers and public authorities.

CHOOSING THE COMPANY NAME AND REGISTERED ADDRESS

Choosing the right company name and registered address is one of the first practical steps when setting up a Danish private limited company (ApS). Both elements must comply with Danish company law and the formal requirements of the Danish Business Authority (Erhvervsstyrelsen), and they will appear in all official registers and on your legal documents.

Legal requirements for a Danish ApS company name

Your company name must clearly indicate the legal form of the business. For a limited liability company, the name must include either “ApS” or “Anpartsselskab”. This suffix cannot be omitted in contracts, invoices, website footers or other official communication, as it signals to customers and creditors that the company has limited liability.

The name must be unique in Denmark. Erhvervsstyrelsen will reject names that are identical or confusingly similar to an existing registered company or a protected trade name. Before filing your incorporation documents, it is strongly recommended to search the Central Business Register (CVR) to check whether your preferred name is already in use or too close to an existing one.

The company name must not be misleading. It cannot suggest activities that the company does not in fact carry out, and it cannot imply that the company is a public authority, a bank, an insurance company or another regulated entity unless the company actually holds the required licences. Names that are offensive, discriminatory or contrary to public order will also be refused.

You may register both a formal legal name and one or more secondary business names (also called “binavne”). Secondary names can be useful for branding different business lines under the same legal entity. All registered names will appear in the CVR register and can be used on invoices and marketing materials.

Language, characters and trademarks

Danish company names may be in Danish or in a foreign language, and they can include Latin letters, Danish characters (æ, ø, å), numbers and certain symbols. However, the name must be technically registrable and displayable in the public registers. Excessive use of symbols or non-standard characters may cause the name to be rejected or adjusted.

Registering a company name with Erhvervsstyrelsen does not automatically give you trademark protection. If the name is important for your brand, you should consider checking the Danish Patent and Trademark Office database and, if necessary, registering a national or EU trademark. This can help prevent others from using a confusingly similar name or logo in the same line of business.

Registered address requirements

Every ApS must have a registered address in Denmark. This is the official address that appears in the CVR register and is used for all communication from Danish authorities, including the tax authorities (Skattestyrelsen) and the courts. The address must be a physical location where the company can be reached; a mere P.O. box is not sufficient as the sole registered address.

The registered address can be:

• Commercial office or co-working space
• A virtual office or business service provider’s address, if they offer compliant address services
• The private address of a director or owner, provided that local zoning rules and landlord agreements allow business registration at that address

It is your responsibility to ensure that the address is valid and that you have the right to use it as the company’s official seat. If you use a third-party address provider, you should have a written agreement confirming that they permit registration of your ApS at their address and that they will forward all official mail without delay.

Digital mail and communication with authorities

In Denmark, most communication with public authorities takes place digitally. Once your ApS is registered, you must activate a digital mailbox (e-Boks or a similar solution) linked to the company’s CVR number. Even though the registered address is a physical address, you should expect that important letters, tax notices and reminders will be sent electronically. Keeping your registered address and digital mailbox up to date is essential to avoid missing deadlines or penalties.

Changing the company name or registered address later

Both the company name and the registered address can be changed after incorporation, but changes must be reported to Erhvervsstyrelsen without undue delay. A name change usually requires an amendment to the articles of association and, depending on your setup, a formal resolution by the shareholders or management. The new name must again comply with all Danish naming rules and will only be effective once it has been registered.

Changes to the registered address are typically simpler and can often be filed online by the management through the Virk.dk portal. However, you must ensure that all relevant parties are informed, including your bank, accountant, employees, major customers and suppliers, so that invoices, contracts and payroll documents reflect the new address.

Practical tips when choosing name and address

From a practical and commercial perspective, it is worth choosing a name that is easy to pronounce for both Danish and international clients, and that has an available domain name for your website. Many founders check domain availability and social media handles before finalising the company name to ensure consistent branding.

For the registered address, consider how it will look to customers, banks and potential partners. A stable, professional address can make it easier to open a Danish business bank account, build trust with stakeholders and receive physical correspondence securely. If you expect to move within a short time, you may want to use an address that you can keep for several years, such as a business centre or your accountant’s office, to avoid frequent changes in the public register.

DRAFTING THE ARTICLES OF ASSOCIATION AND FOUNDING DOCUMENTS

The articles of association and the founding documents are the legal backbone of your Danish private limited company (ApS). They define how the company is structured, who controls it and how key decisions are made. Properly drafted documents reduce the risk of disputes with co-owners and problems with the Danish Business Authority (Erhvervsstyrelsen) and SKAT.

What are the founding documents for an ApS?

When you create a new ApS in Denmark, you normally prepare at least:

• the founding document (stiftelsesdokument)
• the articles of association (vedtægter)

In many cases you will also prepare a separate shareholders’ agreement, but this is a private contract between owners and is not filed with the authorities. The founding document and the articles of association must be submitted to the Danish Business Authority as part of the registration.

Founding document (stiftelsesdokument)

The founding document records the decision to establish the ApS and the basic terms of the formation. It must be signed by all founders and must at least include:

• the date of formation
• the names, addresses and CPR/CVR numbers of all founders (individuals or companies)
• a clear statement that an ApS is being formed
• the amount of share capital (minimum DKK 40,000 for an ApS) and the nominal value of each share
• information on payment of the share capital – cash contribution, contribution in kind or a combination
• if there is a non-cash contribution (for example equipment, intellectual property or a business), a description of the assets and their value, normally supported by a valuation report from a state-authorised or registered public accountant
• any special rights granted to founders, board members, management or others (for example right to appoint a board member or receive a specific fee)
• the costs of formation that the company will pay (for example legal and registration fees)
• a reference to and attachment of the articles of association

The founding document is only signed once, at the time of formation. Later changes in the company are made by general meeting resolutions and amendments to the articles of association, not by changing the founding document.

Articles of association (vedtægter)

The articles of association are the company’s internal rulebook. They must comply with the Danish Companies Act (Selskabsloven) and include certain minimum information. Well-drafted articles also regulate practical issues that are not covered in detail by the law.

As a minimum, the articles of association for a Danish ApS must state:

• the company name and any secondary names
• the company’s purpose – for example “to carry on consulting activities within IT and related business”
• the registered office municipality in Denmark
• the amount of share capital and the nominal value of the shares
• the rights attached to the shares – for example whether there are different share classes with different voting or dividend rights
• rules on the general meeting – how and when it is convened, notice periods and how shareholders can participate
• the financial year – for example 1 January to 31 December
• whether the company has a board of directors, an executive board or both, and how they are elected
• whether the company must have an auditor, and if so how the auditor is appointed

Typical additional clauses that are useful in practice

Beyond the legal minimum, you can include additional clauses to make the operation of the ApS clearer and more flexible. Common examples are:

• Restrictions on transfer of shares – for example a requirement for board approval or a right of first refusal for existing shareholders if one owner wants to sell shares
• Pre-emption rights on new issues – giving existing shareholders the right to subscribe for new shares in proportion to their current holdings
• Rules on general meetings – possibility of electronic general meetings, language of the meeting and documents, and whether written resolutions are allowed
• Dividend policy – for example that dividends can only be distributed if the company maintains a certain equity ratio and complies with the solvency test in the Danish Companies Act
• Management powers and limitations – for example that certain major transactions require prior approval from the general meeting or the board
• Deadlock and dispute resolution mechanisms – especially relevant in companies with two or a few equal owners

Language and formal requirements

The articles of association and founding document can be drafted in Danish or English. The Danish Business Authority accepts both languages, but some banks and other institutions may prefer Danish. All information must be clear, consistent and in line with the Companies Act and other Danish regulations, including rules on beneficial ownership and anti-money laundering.

The documents must be signed by all founders, either with a physical signature or with a valid electronic signature (for example MitID). When you register the ApS digitally with the Danish Business Authority, you upload the signed founding document and articles of association through the online system.

Amending the articles of association after registration

After the ApS is registered, you can change the articles of association, but only by a valid resolution of the general meeting. Under the Danish Companies Act, amendments normally require at least a two-thirds majority of both the votes cast and the share capital represented at the meeting, unless the articles themselves require a higher majority.

Changes such as the company name, share capital, share classes, management structure or financial year must be registered with the Danish Business Authority within the statutory deadlines. The updated articles of association must be filed each time they are amended.

Why professional drafting matters

Using standard templates without adapting them to your specific situation can create problems later, for example when bringing in new investors, paying out dividends, selling the company or resolving disagreements between owners. Professional drafting ensures that:

• the documents comply with current Danish law and practice
• the structure supports your tax and financing plans
• rights and obligations of each owner and manager are clearly defined
• the company can grow, raise capital or be sold without unnecessary legal obstacles

Well-prepared articles of association and founding documents make the registration of your ApS smoother and provide a stable legal framework for the future operation of your Danish company.

TAX REGISTRATION: VAT, PAYROLL TAXES AND CORPORATE INCOME TAX

Once your Danish ApS is incorporated, you must register for the relevant taxes with the Danish Tax Agency (Skattestyrelsen). Tax registration is usually done digitally via the Danish Business Authority’s online system (Virk), often at the same time as the company registration. Proper and timely registration is essential to avoid penalties and to ensure that your company can issue valid invoices, pay employees and deduct business expenses.

VAT (Moms) registration

Most ApS companies that sell goods or services subject to VAT in Denmark must register for VAT. You are required to register if your taxable turnover in a 12‑month period exceeds, or is expected to exceed, DKK 50,000. Voluntary VAT registration below this threshold is possible and often beneficial if you have significant input VAT on purchases.

The standard Danish VAT rate is 25% and applies to most goods and services. There are some VAT‑exempt areas (for example certain financial services, health care and education), but these are narrowly defined. When you are VAT‑registered, you must:

• Charge 25% VAT on your taxable sales in Denmark
• Issue invoices that meet Danish VAT invoice requirements
• Keep VAT‑compliant bookkeeping records and documentation
• Submit periodic VAT returns and pay VAT on time

Newly registered companies are typically placed on quarterly VAT reporting. Depending on your turnover, Skattestyrelsen may later move you to monthly or half‑yearly reporting. VAT returns and payments are submitted electronically, and late filing or late payment triggers interest and surcharges.

Corporate income tax registration

All Danish ApS companies are subject to Danish corporate income tax on their worldwide income, unless specific exemptions or double tax treaty rules apply. The current corporate income tax rate in Denmark is 22%. When you register your company, you also register it as a corporate taxpayer with Skattestyrelsen.

The company must file an annual corporate tax return (selvangivelse) after the end of each income year. The deadline depends on whether you use a calendar year or a different financial year, but the return is generally due several months after year‑end and is filed electronically. Based on the expected taxable income, your company will normally pay corporate tax in two instalments during the income year, with a possible third voluntary instalment. Under‑ or over‑payments are adjusted once the final tax assessment is issued, and interest may apply.

Payroll taxes and employer obligations

If your ApS has employees in Denmark, you must register as an employer before you start paying salaries. This is also done via the online registration systems. As an employer, you are responsible for withholding and paying:

• A‑tax (income tax withholding) on employees’ salaries, according to the individual tax cards issued by Skattestyrelsen
• AM‑bidrag (labour market contribution) at a rate of 8% of the gross salary, withheld from the employee’s pay

In addition, you must report salary information (eIndkomst reporting) each time you pay wages, and pay the withheld taxes and contributions by the statutory deadlines, usually monthly. Failure to withhold or report correctly can result in fines and personal liability for management.

Depending on your industry and workforce, you may also have to register for and pay various employer‑related contributions, such as ATP (labour market supplementary pension), industrial injury insurance and other mandatory schemes. These are separate from corporate income tax and VAT, but they are part of your overall payroll compliance.

Other tax‑related registrations and practical points

Some ApS companies must register for additional schemes, for example if they provide certain digital services, operate across EU borders or are involved in excise‑duty goods. It is important to assess your business model at the start to determine all relevant registrations.

To stay compliant and optimise your tax position, you should:

• Choose a suitable financial year and inform the authorities during registration
• Set up bookkeeping procedures that clearly separate VAT, payroll taxes and corporate income tax
• Monitor turnover to know when VAT registration becomes mandatory
• Review your expected profit so that corporate tax instalments are as accurate as possible

Professional accounting support can help ensure that your ApS is correctly registered for VAT, payroll taxes and corporate income tax from day one, and that all deadlines and reporting obligations are met.

REGISTERING AS AN EMPLOYER AND OBLIGATIONS TOWARDS EMPLOYEES

When your Danish ApS hires staff, you must register as an employer and comply with a number of employment, tax and social security obligations. Proper registration and correct handling of salary, tax and working conditions are crucial to avoid fines and liability for unpaid taxes and contributions.

Registering as an employer (eIndkomst and E-income)

Before paying any salary, you must register the company as an employer with the Danish Tax Agency (Skattestyrelsen). This is done via the online system Virk and gives access to the eIndkomst (E-income) reporting system.

Once registered, the company receives a payroll tax number (the same CVR/SE number is used) and can start reporting salary information for each employee. You must report salary, withheld tax and labour market contributions (AM-bidrag) to eIndkomst every time you pay wages.

Withholding tax and labour market contributions

As an employer, your ApS is responsible for withholding and paying:

• Labour market contribution (AM-bidrag) – 8% of the employee’s gross salary before income tax
• A-tax (income tax withheld at source) – according to each employee’s tax card (skattekort) issued by Skattestyrelsen

You must obtain each employee’s electronic tax card via the online system before the first salary payment. If an employee has no tax card, you must withhold tax using the highest rate according to the current rules.

All withheld amounts must be reported and paid to Skattestyrelsen by the statutory deadlines, typically on a monthly basis for small and medium-sized employers. Late reporting or payment can lead to interest and penalties.

ATP, holiday pay and other mandatory contributions

In addition to tax and AM-bidrag, Danish employers must handle several mandatory contributions and employee rights:

• ATP (Arbejdsmarkedets Tillægspension) – a statutory labour market supplementary pension. Both employer and employee contribute. The contribution depends on working hours and is reported and paid together with salary information.
• Holiday pay (feriepenge) – employees earn 2.08 days of paid holiday per month of employment, corresponding to 25 days per year. Holiday pay is normally 12.5% of the employee’s qualifying salary. Many employers pay holiday pay to an external holiday fund such as FerieKonto.
• Maternity, paternity and parental leave schemes – employers may be entitled to reimbursement for wages paid during certain types of leave, but must comply with detailed rules and deadlines for reporting.

Depending on the sector and collective agreements, there can be additional mandatory schemes such as industrial injury insurance, occupational pension schemes and education funds.

Employment contracts and working conditions

Danish law requires that employees who work more than a minimum number of hours per week and for more than a short period receive a written employment contract. The contract must include at least:

• Identity of employer and employee
• Workplace and job title or description of duties
• Start date and, if applicable, end date for fixed-term employment
• Working hours (weekly hours, shifts, overtime rules)
• Salary, bonuses, pension, benefits and payment dates
• Holiday rights and reference to the Danish Holiday Act or relevant collective agreement
• Notice periods and termination conditions

Employers must also comply with rules on working time, rest periods, health and safety at work, non-discrimination, equal pay and protection against unfair dismissal. If a collective agreement applies, its provisions on wages, overtime, supplements and special leave must be followed.

Payroll administration and payslips

Your ApS must run a compliant payroll process and issue a payslip for each salary payment. The payslip must clearly show:

• Gross salary and any allowances or bonuses
• Withheld AM-bidrag and A-tax
• Employee’s share of ATP and any pension contributions
• Holiday pay earned and used
• Net salary paid to the employee

All payroll data must be stored securely for the statutory retention period and be available for tax audits and potential employment disputes. Many companies use Danish payroll systems integrated with eIndkomst to reduce the risk of errors.

Social security, insurance and workplace obligations

Employers in Denmark must ensure that employees are covered by the Danish social security system and that mandatory insurances are in place. This typically includes:

• Industrial injury insurance for all employees
• Compliance with occupational health and safety rules, including workplace assessments and risk evaluations
• Registration with relevant labour market schemes where required by law or collective agreements

If you hire employees from other EU/EEA countries or third countries, you must also check residence and work permits, social security coverage (A1 certificates) and possible registration with Danish authorities.

Using freelancers and consultants

Many new ApS companies consider using freelancers instead of employees. However, Danish authorities can reclassify a freelancer as an employee if the actual working relationship resembles employment (for example, fixed working hours, instructions, integration into the organisation and economic dependence on one client). In such cases, your company can be held liable for unpaid tax, AM-bidrag and employer contributions.

Before engaging freelancers, it is important to assess the real nature of the cooperation and to have clear written agreements that reflect the actual working conditions.

Registering correctly as an employer and understanding your obligations towards employees is a key part of running a compliant ApS in Denmark. Proper planning of payroll, contracts and social security from the start will help you avoid costly corrections and disputes later.

BOOKKEEPING, ANNUAL REPORTS AND AUDIT REQUIREMENTS FOR APS

Proper bookkeeping and timely annual reporting are legal obligations for every Danish private limited company (ApS). They are also essential for tax compliance, access to financing and avoiding personal liability for management. Below you will find an overview of the key rules that apply to ApS companies in Denmark.

Bookkeeping obligations for an ApS

All Danish companies must keep orderly accounting records in accordance with the Danish Bookkeeping Act and the Danish Financial Statements Act. This means your ApS must:

• Record all business transactions on an ongoing basis, in chronological order
• Ensure that every transaction can be documented with vouchers, invoices, bank statements or similar evidence
• Use a bookkeeping system that meets Danish requirements (digital systems are strongly recommended and, in practice, standard)
• Store accounting records, vouchers and supporting documentation securely for at least 5 years
• Be able to present records and documentation to the Danish Tax Agency (Skattestyrelsen) and the Danish Business Authority (Erhvervsstyrelsen) upon request

Bookkeeping must be done in a way that allows a third party to understand the company’s financial transactions and position. If you use foreign currency, you must also keep track of the Danish kroner (DKK) equivalent for tax and reporting purposes.

Annual report and filing deadlines

An ApS is required to prepare an annual report in accordance with the Danish Financial Statements Act and file it electronically with the Danish Business Authority. The annual report must as a minimum include:

• Management statement (management’s responsibility for the financial statements)
• Income statement and balance sheet
• Notes with additional information and accounting policies
• Management commentary (for some accounting classes)
• Auditor’s report, if the company is subject to audit

The annual report must be approved by the general meeting and filed no later than 6 months after the end of the financial year. For example, if your financial year follows the calendar year (1 January – 31 December), the filing deadline is 30 June the following year.

Late filing can lead to daily fines and, in serious or repeated cases, compulsory dissolution of the company by the Danish Business Authority.

Accounting classes and simplified reporting

Danish companies are divided into accounting classes (A, B, C and D) based mainly on size. Most new ApS companies fall into accounting class B (small companies). Small class B companies benefit from simplified reporting requirements compared to larger entities, for example:

• Less extensive note disclosures
• No requirement for a management commentary in many cases
• Possibility to use certain simplifications in measurement and recognition

However, even small ApS companies must prepare a formal annual report in the prescribed format and file it digitally via the official system (e.g. XBRL format).

Audit requirements and audit exemption thresholds

Not all ApS companies are required to have their financial statements audited. Small companies can opt out of statutory audit if they do not exceed two of the following three thresholds for two consecutive financial years:

• Net revenue: DKK 8 million
• Balance sheet total: DKK 4 million
• Average number of full-time employees: 12

If your ApS stays below at least two of these limits for two years in a row, the general meeting can decide to opt out of audit. The decision must be recorded in the articles of association or in the minutes of the general meeting and reflected in the annual report.

If the company exceeds two of the thresholds for two consecutive years, a statutory audit becomes mandatory. Certain regulated industries or companies with specific licenses may also be required to have an audit regardless of size.

Types of assurance: audit, review and assistance

Even if your ApS is exempt from statutory audit, you may still choose to engage a state-authorised or registered public accountant to provide:

• A full audit (highest level of assurance)
• A review (limited assurance, less extensive than an audit)
• Compilation or assistance with financial statements (no assurance, but professional preparation)

Banks, investors or other stakeholders may require audited or reviewed financial statements as a condition for financing or cooperation, even if the law does not require it.

Management responsibility and penalties

The management of an ApS (board of directors and/or executive management) is legally responsible for ensuring that:

• Bookkeeping is carried out correctly and on time
• Annual reports are prepared in accordance with the Danish Financial Statements Act
• Filing deadlines with the Danish Business Authority and the Danish Tax Agency are respected

Failure to comply can result in:

• Fines imposed on the company and, in some cases, on individual members of management
• Compulsory dissolution of the company
• Potential personal liability for management if negligence can be demonstrated

Why use a professional accountant for your ApS

While Danish law allows you to handle bookkeeping and annual reporting yourself, many ApS owners choose to work with a professional accounting firm. A specialist with experience in Danish rules can help you:

• Set up a compliant bookkeeping system from day one
• Prepare and file your annual report correctly and on time
• Assess whether your company can opt out of audit and whether it is advisable
• Coordinate financial reporting with VAT, payroll and corporate tax obligations

This reduces the risk of errors, penalties and unnecessary tax costs, and allows you to focus on running and growing your business in Denmark.

SHAREHOLDER AGREEMENTS AND PROTECTION OF MINORITY SHAREHOLDERS

Shareholder agreements are not legally required when you establish a Danish ApS, but in practice they are one of the most important documents if there is more than one owner. While the articles of association are registered with the Danish Business Authority and are publicly available, a shareholder agreement is a private contract between the owners that regulates how the company is run, how decisions are made and how conflicts are resolved.

For minority shareholders, a well-drafted shareholder agreement is often the main tool to secure influence and protection against unfair treatment by majority owners. Without such an agreement, the default rules in the Danish Companies Act (Selskabsloven) apply, which in many situations give the majority significant control.

Typical content of a Danish shareholder agreement

A shareholder agreement for a Danish ApS will typically regulate at least the following areas:

• Ownership structure and any vesting or earn-out mechanisms
• Voting rights and how shareholder meetings are conducted
• Matters that require enhanced or unanimous approval
• Transfer of shares, pre-emption rights and lock-up periods
• Exit scenarios (sale of the company, IPO, buy-back of shares)
• Dividend policy and reinvestment of profits
• Non-compete and non-solicitation obligations
• Deadlock resolution and dispute resolution mechanisms

Many of these clauses are particularly relevant for minority shareholders, because they can limit the ability of the majority to change the direction of the company or to dilute or squeeze out smaller owners without their consent.

Protection mechanisms for minority shareholders

The Danish Companies Act contains a number of mandatory rules that protect all shareholders, including minorities. On top of this, further protection can be agreed in the shareholder agreement and, where appropriate, reflected in the articles of association.

Key protection mechanisms include:

• Information rights – Every shareholder has a right to receive the annual report, to attend the general meeting and to ask questions about the company’s affairs. A shareholder agreement can extend this by granting minorities regular management reporting, access to budgets and business plans, or the right to appoint an observer to the board.
• Enhanced voting requirements – Under the Companies Act, certain decisions (for example amendments to the articles of association, capital increases and reductions, mergers and dissolutions) require at least a two-thirds majority of both votes and capital represented at the general meeting. A shareholder agreement can raise this threshold or require unanimous consent for specific “reserved matters”, giving minority shareholders a veto on key issues such as major investments, changes in business area or related-party transactions.
• Pre-emption rights on share transfers – By default, shares in an ApS are not freely transferable if the articles of association restrict transfers. A shareholder agreement almost always includes pre-emption rights, giving existing shareholders the first right to buy shares that another shareholder wishes to sell. This prevents a majority shareholder from bringing in new owners without giving minorities a chance to maintain their percentage.
• Anti-dilution protection – New share issues can dilute minority holdings. The Companies Act already provides pre-emptive subscription rights in proportion to existing ownership, unless waived. A shareholder agreement can strengthen this by requiring that any issue below fair market value must be approved by a qualified majority or that minorities are compensated if they cannot participate.
• Tag-along rights – If a majority shareholder sells its stake to a third party, tag-along clauses allow minority shareholders to sell their shares on the same terms and conditions. This prevents a situation where the majority exits at a premium while minorities remain with a new controlling owner they did not choose.
• Drag-along rights with safeguards – Drag-along clauses allow majority shareholders to require minorities to sell their shares in a full sale of the company, ensuring a clean exit for the buyer. From a minority perspective, it is important that the shareholder agreement sets minimum price conditions, equal treatment and clear procedures so that they are not forced out on unfavourable terms.
• Dividend policy – The board and the general meeting decide on distribution of dividends, subject to solvency and capital protection rules. A shareholder agreement can define a target payout ratio or conditions under which profits must be distributed, protecting minorities from a majority that indefinitely retains profits without a clear business reason.

Board representation and governance

In many ApS companies, especially those with external investors, minority shareholders negotiate the right to appoint one or more board members. While the Companies Act does not grant a general right to board representation based solely on shareholding size, a shareholder agreement can allocate board seats between different shareholder groups.

For minority shareholders, board representation provides direct insight into the company’s operations and influence over strategic decisions. The agreement can also define:

• How many board members the company should have
• Quorum and voting rules at board level
• Which decisions require board approval versus shareholder approval
• Conflict of interest rules and related-party transaction approval

These governance rules help ensure that management and majority owners cannot unilaterally implement significant changes without minority input.

Fair valuation and exit provisions

Exit clauses are crucial for minority protection, because they determine how and at what price a shareholder can leave the company or be required to sell. Typical mechanisms include:

• Valuation methods – The agreement can specify how the company or shares are valued in different scenarios (for example, sale to a third party, buy-back by the company, compulsory transfer due to breach or employment termination). Common approaches include independent valuation by a state-authorised public accountant, pre-agreed formulas based on EBITDA or revenue multiples, or reference to the price offered by an external buyer.
• Good leaver / bad leaver rules – In owner-managed and start-up ApS companies, shareholders are often also employees or founders. The agreement may differentiate between “good leavers” (for example, leaving due to illness, retirement or mutual agreement) and “bad leavers” (for example, dismissal for gross misconduct or breach of non-compete). Good leavers may receive fair market value for their shares, while bad leavers may receive a discounted price. From a minority perspective, it is important that these definitions are clear and balanced.
• Put and call options – Put options allow a minority shareholder to require the majority or the company to buy their shares under defined conditions (for example, after a certain number of years or in case of fundamental disagreement). Call options allow the majority to buy out a minority under agreed terms. Properly structured, these options can provide predictability and reduce the risk of deadlock.

Legal enforceability and relation to the Companies Act

Shareholder agreements are binding contracts under Danish law. However, they do not automatically bind the company itself or third parties, and they cannot override mandatory provisions of the Danish Companies Act. If there is a conflict between the shareholder agreement and the articles of association, third parties and the Danish Business Authority will generally rely on the articles of association.

For this reason, important structural rules that affect all shareholders and third parties (such as transfer restrictions, share classes, voting rights and capital structure) should be aligned between the shareholder agreement and the articles of association. Many companies choose to include the core principles in the articles and regulate more detailed arrangements in the private agreement.

If a shareholder breaches the agreement, typical remedies include damages, contractual penalties, suspension of voting rights or compulsory transfer of shares. Dispute resolution clauses often refer disputes to Danish courts or to arbitration seated in Denmark, sometimes with a requirement for prior mediation.

Practical recommendations when setting up an ApS

When you create a new ApS with more than one owner, it is advisable to negotiate and sign a shareholder agreement at the same time as the founding documents. This is particularly important if:

• Ownership is not equal and one or more shareholders will be in a clear minority
• Some shareholders contribute capital while others contribute work or intellectual property
• External investors (for example business angels or venture funds) participate
• You expect future capital rounds that may dilute existing owners

From a minority shareholder’s perspective, you should pay special attention to:

• Which decisions you can influence or veto
• How your shares can be diluted or transferred
• How and when you can exit and how your shares will be valued
• What information and reporting you will receive
• How disputes will be resolved and under which law and forum

Well-structured shareholder agreements reduce the risk of conflicts, make the ownership structure more transparent and provide both majority and minority shareholders with clear rules for cooperation throughout the life cycle of the Danish ApS.

DIRECTORS’ AND MANAGEMENT’S LIABILITY AND DUTY OF CARE

In a Danish private limited company (ApS), the board of directors and the executive management (typically the managing director/CEO) have clear legal responsibilities and a duty of care towards the company, its shareholders and creditors. Understanding these obligations is essential, because Danish law allows personal liability in cases of gross negligence, intentional misconduct or serious non-compliance.

General duty of care and loyalty

Directors and management must act in the best interest of the company as a whole, not individual shareholders or their own personal interests. This includes a duty to:

• Act with the care and diligence that can reasonably be expected from a person in their position
• Base decisions on adequate information and proper documentation
• Avoid conflicts of interest and disclose them when they arise
• Refrain from using company opportunities or assets for private benefit
• Treat shareholders fairly and not favour one group of shareholders unjustifiably over another

Key legal responsibilities under the Danish Companies Act

The Danish Companies Act (Selskabsloven) sets out a number of concrete obligations for directors and management of an ApS, including:

• Ensuring that the company is properly registered with the Danish Business Authority (Erhvervsstyrelsen) and that all statutory information is kept up to date
• Maintaining adequate bookkeeping and internal controls so that the company’s financial position is always reliable and traceable
• Preparing and approving the annual report within the statutory deadline and filing it with the Danish Business Authority
• Ensuring that tax, VAT and payroll obligations are registered correctly and that returns and payments are made on time
• Monitoring the company’s capital position and reacting if equity is lost or the company becomes insolvent

Capital loss and duty to act

If the company’s equity is reduced to less than half of the registered share capital, the board and management must, without undue delay:

• Prepare a balance sheet to assess the financial situation
• Present the situation to the shareholders
• Propose measures to restore the capital or otherwise address the financial difficulties

Failing to act when equity is significantly reduced can increase the risk of personal liability, especially if the company continues trading and incurs new debts that it is unlikely to be able to pay.

Insolvency, wrongful trading and creditor protection

Directors and management must continuously assess whether the company is able to meet its obligations as they fall due. When the company is insolvent or close to insolvency, their focus must shift from shareholder interests to creditor protection. They must not:

• Continue normal operations and incur new obligations if there is no realistic prospect of avoiding insolvency
• Prefer certain creditors in an unfair or unlawful way
• Transfer assets out of the company at undervalue or without proper business justification

If management continues trading in a way that worsens creditors’ position, they can be held personally liable for losses caused by wrongful trading and, in serious cases, may be disqualified from serving as directors in Danish companies for a period of time.

Personal liability of directors and management

As a starting point, an ApS limits the financial risk of the owners to the amount of their investment. However, this limitation does not protect directors and managers who breach their duties. They can become personally liable if they:

• Act intentionally or with gross negligence and cause financial loss to the company, shareholders or creditors
• Fail to comply with statutory obligations, such as filing the annual report, maintaining proper accounts or registering beneficial owners
• Approve unlawful distributions, such as dividends that are not covered by available profits or that leave the company undercapitalised
• Ignore clear signs of financial distress and continue trading without taking appropriate measures

Personal liability is assessed case by case, and Danish courts look at whether a prudent and diligent director in a similar position would have acted differently.

Delegation, internal organisation and documentation

The board and management can delegate tasks, but not overall responsibility. They must ensure that:

• The company has clear internal procedures for decision-making, approvals and financial controls
• Responsibilities between the board, management and any external advisers (such as accountants) are clearly defined
• Important decisions are documented in board minutes and management records
• They receive regular financial reports and key figures that allow them to monitor the company’s performance and liquidity

Well-structured governance and thorough documentation not only improve control over the business, but also help demonstrate that directors and management have fulfilled their duty of care if their actions are later reviewed by authorities, creditors or courts.

Use of advisers and reliance on professional assistance

Directors and managers are allowed to rely on information and advice from qualified professionals, such as accountants, auditors and lawyers, provided that this reliance is reasonable. However, they must still:

• Assess whether the adviser is competent and independent in the specific matter
• Understand the key conclusions and risks highlighted by the adviser
• Challenge information that appears incomplete or inconsistent with other facts

Outsourcing bookkeeping or using an external accountant does not remove the legal responsibility of management for the accuracy of the accounts and compliance with Danish law.

Practical steps to reduce risk for directors and management

To manage their responsibilities effectively and reduce the risk of personal liability, directors and managers of a Danish ApS should:

• Ensure that the company has up-to-date and accurate bookkeeping from day one
• Monitor cash flow, equity and key financial indicators on a regular basis
• Hold regular board and management meetings and keep written minutes
• Implement clear approval procedures for major contracts, investments and related-party transactions
• Seek professional advice early when facing financial difficulties, complex tax issues or structural changes
• Consider directors’ and officers’ (D&O) liability insurance as an additional layer of protection

By understanding and actively managing their legal duties, directors and management can protect themselves from unnecessary risk and ensure that the ApS operates in full compliance with Danish corporate, tax and accounting regulations.

BENEFICIAL OWNER (UBO) REGISTRATION AND ANTI-MONEY LAUNDERING RULES

All Danish limited liability companies (ApS) must register their beneficial owners (UBO – Ultimate Beneficial Owner) with the Danish Business Authority (Erhvervsstyrelsen). This is a legal requirement under the Danish Anti-Money Laundering Act and the Danish Companies Act and applies whether your owners are individuals or other companies, in Denmark or abroad.

A beneficial owner is the natural person who ultimately owns or controls the company. As a rule of thumb, any individual who directly or indirectly owns more than 25% of the shares or voting rights, or otherwise exercises controlling influence over the company’s management, will be considered a UBO.

Who qualifies as a beneficial owner in a Danish ApS

You must identify all natural persons who, directly or through one or more companies, trusts or other legal arrangements:

• Own more than 25% of the share capital, or
• Control more than 25% of the voting rights, or
• Have the right to appoint or remove a majority of the board or management, or
• Otherwise exercise decisive influence over the company’s decisions.

If no such person can be identified, or if you have reasonable doubt, you must register the members of the executive management (for example the managing director) as “deemed beneficial owners”. You are required to document why no actual UBOs could be identified.

What information must be registered

The UBO registration is done online in the Danish Business Register (CVR). For each beneficial owner you must provide at least:

• Full name
• National identification number (CPR) or date of birth
• Nationality
• Country of residence
• Type and extent of ownership or control (for example 40% of shares and votes)
• Basis for control if it is not based on ownership (for example shareholder agreement)

If the beneficial owner does not have a Danish CPR number, you must provide equivalent foreign identification details and keep copies of the documentation in your internal records.

Deadlines and ongoing obligations

You must register the beneficial owners as part of the company formation process. In practice, the registration must be completed shortly after the ApS is created and before the company starts operating. If you fail to register UBOs, the Danish Business Authority can refuse to complete the registration of the company or later impose enforcement measures.

The information must be kept up to date. Whenever there is a change in ownership or control – for example a share transfer that crosses the 25% threshold, a new shareholder agreement, or a change in management that affects control – you must update the UBO registration without undue delay. There is no annual “grace period”: updates are required as soon as the company becomes aware of the change.

Access to UBO information

Basic UBO information is publicly available through the Danish Business Register. This transparency is intended to prevent misuse of companies for money laundering, terrorist financing and tax evasion. Certain sensitive personal data is not publicly visible, but must still be recorded and stored by the company and may be accessed by authorities and obliged entities such as banks and auditors.

Anti-money laundering (AML) obligations for Danish companies

Not all ApS companies are directly subject to the full Danish Anti-Money Laundering Act. However, if your company operates in sectors covered by AML rules – such as accounting and bookkeeping services, legal services in certain areas, financial services, virtual currency services, real estate brokerage or certain trust and company service activities – you will have additional obligations, including:

• Carrying out customer due diligence (KYC) before entering into a business relationship
• Identifying and verifying your customers’ beneficial owners
• Assessing and documenting the money laundering and terrorist financing risks related to your business model and customers
• Monitoring transactions and business relationships on an ongoing basis
• Reporting suspicious transactions or activities to the Danish Money Laundering Secretariat (SØIK)
• Implementing internal policies, procedures and controls for AML compliance
• Providing regular AML training to relevant employees

Even if your ApS is not directly covered by the AML Act, you will still be affected indirectly. Banks, payment institutions, auditors, lawyers and other AML-obliged partners must perform KYC checks on your company. They will request up-to-date UBO information, corporate documents and identification of directors and owners before opening a bank account, granting financing or providing professional services.

Record-keeping and documentation

You must be able to demonstrate how you identified your beneficial owners. This includes keeping:

• Share registers and ownership structure charts
• Shareholder agreements and voting agreements
• Copies of ID documents for beneficial owners, where required by law or by your bank or auditor
• Internal notes explaining why certain persons are considered UBOs, or why no UBOs could be identified

Documentation related to UBO identification and AML measures must generally be kept for at least five years after the end of the business relationship or after the relevant transaction, depending on the specific AML obligations that apply to your company.

Sanctions for non-compliance

Failure to register beneficial owners, to keep the information updated or to comply with AML obligations can lead to:

• Orders and injunctions from the Danish Business Authority
• Daily fines until the registration is corrected
• Police reports and criminal fines for serious or repeated breaches
• In extreme cases, compulsory dissolution of the company

In addition, banks and other financial institutions may refuse to open or maintain accounts for companies that do not have correct and up-to-date UBO information or that cannot document their AML compliance.

Ensuring accurate UBO registration and robust AML procedures from the start will make it easier to work with Danish banks, investors and professional advisers and will reduce the risk of regulatory issues in the future.

OPENING A DANISH BUSINESS BANK ACCOUNT FOR AN APS

Opening a Danish business bank account is a key step in making your ApS fully operational. In practice, you cannot complete the registration of many taxes, pay salaries or receive customer payments efficiently without a local business account. Danish banks are strictly regulated and must comply with anti‑money laundering rules, which means the onboarding process can be thorough and sometimes time‑consuming.

Can you register an ApS without a bank account?

When you incorporate an ApS with a cash contribution, you must document that the share capital of at least DKK 40,000 has been paid. This can be done in two main ways:

• by depositing the capital into a temporary or permanent business account at a Danish bank and obtaining a bank confirmation, or
• by having a Danish state‑authorised or registered public accountant issue a confirmation that the capital has been paid in.

In practice, many founders first incorporate the company using an accountant’s confirmation and then open the business bank account after the company has obtained a CVR number. This can speed up the incorporation, but you still need a bank account shortly after formation to run the business.

Typical requirements from Danish banks

Danish banks are required to perform extensive “Know Your Customer” (KYC) and anti‑money laundering (AML) checks before opening a business account. You should expect to provide at least the following:

• Company documents: CVR registration, articles of association, founding documents and ownership structure
• Identification of all owners and management: passport or national ID, proof of address and information on beneficial owners holding 25% or more of the shares or voting rights
• Business description: detailed explanation of activities, expected customers and suppliers, main markets (countries), and whether you will trade outside the EU/EEA
• Financial information: expected annual turnover, number and size of transactions, initial funding and source of funds
• Tax and compliance information: confirmation of tax residence and, for foreign owners, possible tax identification numbers in other countries

If the company has foreign owners, operates in higher‑risk sectors or expects large cross‑border payments, the bank will usually ask for additional documentation and may take longer to process the application.

Step‑by‑step process to open a business account

1. Choose a bank and account type
   Most major Danish banks offer standard business accounts for ApS companies, often combined with online banking, payment cards and merchant services. Compare account fees, transaction costs, online banking language options and integration with your accounting software.
2. Submit an online application
   Many banks start with an online form where you provide basic company data, ownership information and a short business description. Based on this, the bank decides whether to proceed with a full onboarding.
3. Provide KYC and AML documentation
   The bank will request copies of IDs, company documents and a more detailed description of your business model and expected transactions. In some cases, you may be asked for business plans, contracts or invoices to document the commercial purpose.
4. Compliance review and decision
   The bank’s compliance department reviews your case. For straightforward, low‑risk companies with Danish‑resident owners, this can be relatively quick. For more complex or international structures, it may take several weeks.
5. Account activation and access
   Once approved, the bank opens the account, provides an account number (IBAN) and sets up online banking. You will typically receive NemID/MitID Erhverv or other secure login methods to manage the account digitally.

Using the account for share capital and ongoing operations

After the account is opened, you can transfer the share capital and use it for normal company expenses. The capital is not “frozen”; it can be used to pay suppliers, salaries and other business costs as long as the company remains solvent and complies with the Danish Companies Act. You should avoid any payments that look like private withdrawals or loans to owners, as these can be treated as illegal shareholder loans and taxed as salary or dividends.

Challenges for foreign owners and non‑resident directors

Foreign founders often experience stricter scrutiny and longer processing times. Common challenges include:

• Requirement for certified translations of documents issued outside Denmark
• Additional questions about tax residence, source of funds and business rationale for operating in Denmark
• Reluctance from some banks to onboard companies with complex international structures or owners from higher‑risk jurisdictions

In some cases, banks may require at least one Danish‑resident director or signatory, or they may refuse the application if they consider the risk profile too high. It is therefore important to prepare complete documentation and a clear, credible business description before approaching the bank.

Practical tips to improve your chances

• Prepare a short written business description in clear English, explaining what you sell, to whom, in which countries and how you get paid
• Have your ownership structure ready, including a simple chart if there are holding companies or multiple shareholders
• Be realistic and specific about expected annual turnover, average invoice size and main currencies
• Ensure that all owners and directors can quickly provide ID and proof of address that meet the bank’s formal requirements
• Consider working with a Danish accountant or corporate service provider who is familiar with bank requirements and can help you present the case

A well‑prepared application and transparent communication with the bank significantly increase the likelihood of obtaining a Danish business bank account for your ApS and avoiding delays in starting your operations.

CHOOSING FINANCIAL YEAR AND ACCOUNTING CLASS FOR YOUR COMPANY

When you register a new ApS in Denmark, you must choose both a financial year and an accounting class. These choices affect your reporting deadlines, audit obligations and the level of detail required in your annual report. Making the right decision from the start can save you time, money and administrative work later.

Choosing the financial year for your ApS

The financial year (regnskabsår) is the 12‑month period your accounts cover. In Denmark, most companies choose either the calendar year (1 January – 31 December) or a “broken” financial year that better matches their business cycle.

Key points when choosing your financial year:

• The financial year normally lasts 12 months. A shorter or longer first financial year is possible when starting the company, but it may not exceed 18 months.
• Many ApS companies choose the calendar year because it aligns with the personal tax year and simplifies communication with authorities and banks.
• Seasonal businesses (for example, tourism or retail) often choose a financial year that ends after their high season, so the annual report reflects a full season and stock levels.
• Once chosen, changing the financial year requires a formal decision by the general meeting, an update of the articles of association and registration with the Danish Business Authority.

For tax purposes, the corporate income tax year follows your financial year. Your tax return and payment deadlines are calculated from the end of that financial year, so it is important to coordinate your choice with expected cash flow and reporting capacity.

Understanding Danish accounting classes

Danish companies are divided into accounting classes (regnskabsklasser) based on size. The class determines the minimum content of the annual report, disclosure requirements and whether an audit is mandatory.

The main classes relevant for an ApS are:

Accounting class B – small and medium-sized companies

Most new ApS companies start in accounting class B. You fall under class B if your company does not exceed two of the following three thresholds for two consecutive financial years:

• Net turnover: DKK 89 million
• Total assets: DKK 44 million
• Average number of full‑time employees: 50

Within class B there is a distinction between micro, small and medium‑sized entities, but the general rules are similar: you must prepare an annual report with at least a management statement, income statement, balance sheet, notes and, in some cases, a management commentary.

Class B companies can often opt out of statutory audit if they are small enough. An ApS may be exempt from audit if it does not exceed two of the following thresholds for two consecutive financial years:

• Net turnover: DKK 8 million
• Total assets: DKK 4 million
• Average number of full‑time employees: 12

If you stay below these limits, the general meeting can decide to prepare an unaudited annual report. Many small ApS companies choose this option to reduce costs, but banks, investors or other stakeholders may still require an audit voluntarily.

Accounting class C – larger companies

Your ApS moves to accounting class C if it exceeds two of the following thresholds for two consecutive financial years:

• Net turnover: DKK 89 million
• Total assets: DKK 44 million
• Average number of full‑time employees: 50

Class C companies face stricter reporting requirements, including more detailed notes, a mandatory management commentary and no possibility to opt out of audit. If you expect rapid growth, it can be wise to structure your accounting and internal controls early so that a future transition to class C is smooth.

How to choose the right accounting class in practice

You do not “apply” for an accounting class when registering the company. Instead, your class is determined automatically based on your size. However, you should plan for:

• Expected turnover and number of employees in the first 2–3 years
• Whether investors, banks or partners will require audited financial statements
• How much administrative work you can handle internally versus outsourcing to an accountant

Most new ApS companies start as small class B entities and are allowed to choose an unaudited annual report, provided they stay below the audit exemption thresholds. If your business plan shows that you will quickly exceed these limits, it may be better to implement audit‑ready procedures from day one.

Deadlines for filing the annual report

Regardless of accounting class, your Danish annual report must be filed electronically with the Danish Business Authority no later than 5 months after the end of the financial year for most ApS companies. Late filing can result in fines and, in serious cases, compulsory dissolution of the company.

Choosing a financial year that fits your workload and the availability of your accountant makes it easier to meet these deadlines. For example, if you know that your business is very busy in January and February, you may prefer a financial year that ends later in the spring or summer.

Aligning financial year and accounting class with your overall strategy

When creating a new ApS, it is worth discussing the financial year and expected accounting class with a Danish accountant before registration. A well‑chosen financial year can improve liquidity planning and reduce stress around reporting deadlines, while understanding the accounting class helps you anticipate audit requirements, disclosure obligations and the level of detail needed in your bookkeeping from the very beginning.

DISTRIBUTION OF DIVIDENDS AND OTHER PAYMENTS TO OWNERS

In a Danish private limited liability company (ApS), any transfer of value from the company to its owners is strictly regulated. The most common forms are dividends, repayment of loans from owners, interest on shareholder loans, and salary to owner-managers. All payments must comply with the Danish Companies Act and Danish tax rules to avoid reclassification, additional tax and potential personal liability for management.

When and how dividends can be distributed

Dividends may only be distributed if the company has sufficient distributable reserves. In practice, this means:

• The company must have positive retained earnings or other free reserves according to the latest approved annual report
• The share capital and any non-distributable reserves must remain fully covered after the dividend
• The board of directors or management must confirm that the dividend is justifiable considering the company’s liquidity and financial position

Dividends are normally decided at the annual general meeting when the shareholders approve the annual report. It is also possible to pay interim dividends during the financial year, but only if:

• An interim balance sheet is prepared in accordance with the Danish Financial Statements Act
• The interim balance sheet is approved by the management and, if applicable, the board
• The same solvency and liquidity requirements are met as for ordinary dividends

Dividend resolutions must be documented in minutes of the general meeting or written shareholder resolutions and kept with the company records.

Taxation of dividends paid by a Danish ApS

Danish corporate income tax is levied at 22% on the company’s taxable profits before any dividend distribution. After tax, the remaining profit can be distributed as dividends. The tax treatment then depends on whether the shareholder is a Danish individual, a Danish company or a foreign owner.

Dividends to Danish individual shareholders

Dividends received by individuals resident in Denmark are taxed as share income. For the current rules:

• Share income up to DKK 61,000 per person per year (double for spouses taxed jointly: DKK 122,000) is taxed at 27%
• Share income above this threshold is taxed at 42%

These thresholds apply to the individual’s total share income from all sources (dividends and certain capital gains). The company must normally withhold 27% dividend tax at source when paying dividends to Danish resident individuals and report the payment to the Danish Tax Agency (Skattestyrelsen).

Dividends to Danish corporate shareholders

Dividends received by a Danish company may be tax-exempt if the shareholding qualifies as:

• Subsidiary shares: the recipient company holds at least 10% of the share capital in the distributing company
• Group shares: the companies are part of the same Danish or international group under the Danish tax group rules

Where the exemption applies, dividends are generally not subject to withholding tax and are not taxed in the hands of the receiving company. If the shareholding does not qualify, dividends are usually taxable at the standard corporate tax rate of 22%.

Dividends to foreign shareholders and withholding tax

Dividends paid by a Danish ApS to foreign shareholders are, as a starting point, subject to 27% Danish withholding tax. However, the effective rate may be reduced or eliminated if:

• The shareholder is a company resident in an EU/EEA country and holds at least 10% of the shares (EU Parent-Subsidiary Directive and Danish participation exemption rules)
• A double tax treaty between Denmark and the shareholder’s country of residence provides for a lower withholding tax rate (often 0%, 5% or 15%)

To apply a reduced treaty rate or exemption, proper documentation of tax residency and ownership must be obtained and kept by the company. If 27% is withheld and the final rate is lower, the shareholder can normally apply for a refund from the Danish tax authorities.

Other payments to owners: salary, loans and interest

Besides dividends, owners can receive money from the company in other ways. Each type of payment has specific legal and tax consequences.

Salary to owner-managers

Owners who work in the company can receive a salary. Salary is deductible for the company and taxed as personal income for the individual, subject to Danish income tax, labour market contribution (AM-bidrag) of 8% and, where applicable, municipal and church taxes. The company must:

• Register as an employer with the Danish Tax Agency
• Withhold A-tax (PAYE), AM-bidrag and any ATP contributions
• Report salary and withholdings monthly via eIncome (eIndkomst)

Salary must be commercially justifiable and reflect the work actually performed. Excessive salary may be challenged by the tax authorities and partly reclassified as dividend.

Shareholder loans and repayments

Danish rules on shareholder loans are strict. As a general principle, the company may not grant loans, provide security or make similar financial assistance to its owners, management or related parties, unless very specific exceptions apply. If an unlawful shareholder loan arises, it must normally be repaid, and:

• The amount can be taxed as dividend or salary for the recipient
• Interest may be imputed for tax purposes
• Management can incur personal liability for allowing the loan

Repayment of a legitimate loan from the shareholder to the company (i.e. the shareholder has lent money to the ApS) is not considered a dividend. Interest paid by the company on such a loan is generally tax-deductible for the company and taxable as capital income for the individual lender, or as business income for a corporate lender.

Corporate law constraints and management responsibility

Any payment to owners must comply with the Danish Companies Act rules on protection of the share capital and creditors. This includes:

• No distribution may be made if the company is insolvent or would become insolvent as a result
• Only distributable reserves may be used for dividends and other equity distributions
• Hidden distributions (e.g. selling assets to owners below market value) are treated as unlawful dividends

Management has a duty to ensure that distributions are lawful and financially responsible. If an unlawful distribution is made, the recipients may be obliged to repay the amount, and members of management can be held personally liable for losses caused to the company or its creditors.

Planning distributions efficiently

For owner-managed ApS companies, it is often relevant to consider the balance between salary and dividends. Key aspects include:

• Salary is deductible for the company but taxed at personal income rates, which can exceed 50% including all taxes
• Dividends are paid from after-tax profits (22% corporate tax) and then taxed as share income at 27% or 42% for individuals
• Social security and pension contributions, holiday pay and other employment-related costs apply to salary but not to dividends

An optimal structure depends on the owner’s total income, family situation, other investments and long-term plans. It is advisable to prepare annual tax and cash flow forecasts before deciding on the mix of salary, dividends and loan repayments.

Documentation and practical steps

To ensure that distributions and other payments to owners are compliant and traceable, the company should:

• Keep accurate and up-to-date bookkeeping records
• Prepare and approve annual financial statements in accordance with the chosen accounting class
• Document all dividend decisions in shareholder resolutions and management minutes
• File and pay any withholding tax on dividends within the statutory deadlines
• Maintain proper loan agreements and interest calculations for any shareholder loans to the company

Well-structured and documented distributions help avoid disputes between shareholders, reduce the risk of tax reassessments and protect management against personal liability.

CONVERTING, MERGING OR LIQUIDATING AN APS IN THE FUTURE

When you create an ApS, it is worth planning for the future. Over time, you may want to convert the company into a different legal form, merge it with another business or close it down completely. Each option has specific legal, tax and accounting consequences under Danish law, and it is important to prepare properly to avoid unexpected costs and personal liability.

Converting an ApS to another company form

The most common conversion is from a private limited company (ApS) to a public limited company (A/S). This is typically relevant if you want to raise more capital, attract institutional investors or prepare for a listing. A conversion does not create a new legal entity; the company continues with the same CVR number, but under a new company form.

To convert an ApS into an A/S, you must, among other things:

• Increase the share capital to at least DKK 400,000 fully paid in
• Adopt new articles of association that meet the requirements for an A/S
• Prepare a balance sheet for the conversion date and, in many cases, have it audited
• Have the shareholders’ meeting approve the conversion with the required majority
• Register the conversion with the Danish Business Authority (Erhvervsstyrelsen)

It is also possible to convert an ApS into a personally owned company (for example a sole proprietorship) or a partnership structure through a tax-neutral restructuring, if the conditions in the Danish tax legislation are met. This typically requires a restructuring plan, a valuation of the company and timely filing of forms with the Danish Tax Agency (Skattestyrelsen). The choice of method affects whether hidden reserves and gains are taxed immediately or can be deferred.

Merging an ApS with another company

A merger can be relevant if you want to consolidate several companies in a group, acquire another business or simplify your structure. Under the Danish Companies Act, an ApS can merge with other ApS and A/S companies, and in certain cases with foreign companies within the EU/EEA, provided the legal requirements are met.

Key steps in a merger typically include:

• Preparation of a merger plan and, if required, a merger statement from management
• Determination of the exchange ratio for shares and any cash compensation
• Preparation of merger balance sheets and, in many cases, an auditor’s statement
• Approval of the merger by the shareholders’ meetings of the merging companies
• Registration of the merger with the Danish Business Authority

From a tax perspective, you can often carry out a merger as tax-neutral if the conditions in the Danish Merger Tax Act are fulfilled. In a tax-neutral merger, assets and liabilities are transferred at tax values, and taxation of hidden gains is deferred. If the conditions are not met, the merger is treated as a taxable transfer, which can trigger corporate income tax on gains and, in some cases, taxation for the shareholders. Proper planning and documentation are therefore crucial.

Liquidating and closing an ApS

If you no longer need your ApS, you can close it either through a solvent voluntary liquidation or, in simpler cases, through a so-called “deletion at the owners’ request” (frivillig opløsning). The right method depends on whether the company has debts, ongoing contracts and employees.

In a voluntary liquidation, a liquidator is appointed to wind up the company. The liquidator realises assets, pays creditors and distributes any remaining funds to the shareholders. The process includes:

• Decision by the shareholders’ meeting to enter into liquidation
• Appointment of a liquidator and registration with the Danish Business Authority
• Notification to creditors and settlement of all liabilities, including tax and VAT
• Preparation of final accounts and tax returns up to the liquidation date
• Distribution of remaining equity to the shareholders and final deregistration

For a company without debts, employees or unresolved obligations, it may be possible to close the ApS more quickly by requesting deletion. All creditors must be paid, and you must ensure that VAT registration, payroll registrations and other public registrations are terminated. Any remaining funds distributed to shareholders are normally treated as dividends or capital gains, depending on the structure and documentation.

Tax and accounting considerations

Converting, merging or liquidating an ApS always has tax consequences. You must consider corporate income tax on hidden reserves, VAT adjustments on fixed assets, payroll obligations, and the taxation of distributions to shareholders. In addition, you must prepare closing financial statements, ensure correct bookkeeping up to the effective date and keep accounting material for the statutory retention period, even after the company has been deregistered.

Because the rules are detailed and the financial impact can be significant, it is advisable to involve an accountant early in the process. Proper planning helps you choose the most tax-efficient structure, comply with Danish company law and avoid personal liability for management and owners.

DEPOSITING SHARE CAPITAL

When setting up a new ApS company in Denmark, you can choose to deposit the minimum required capital of DKK 20,000 in cash or non-cash assets. Depositing cash is the simplest and fastest method, while non-cash deposits, such as cars, goods, or inventory, are more complex and costly. Non-cash deposits require an auditor to verify the value of the items, and the auditor's fee can range from DKK 5,000 - 15,000 + VAT. It can also be challenging to find an auditor willing to perform this type of audit. Therefore, it is usually recommended to invest the required equity in cash and sell any assets to the company later if needed. This is the easiest and most cost-effective solution.