Shutting Down a Danish APS Business in Denmark

If a Danish entrepreneur decides to close an ApS company, they need to choose the appropriate procedure based on the company's material condition. In Denmark, there are five primary types of proceedings and closures, which include:

  1. Restructuring: If the company can restructure both its finances and operations, it can file a restructuring petition with the court to prevent bankruptcy proceedings from starting. The court will appoint a restructuring administrator to oversee the proceedings.
  2. Liquidation on the basis of a statement of shareholders: If the company is solvent, it can be liquidated voluntarily by publicly announcing its decision. Creditors then have three months to file their claims. A liquidator, such as a lawyer, is appointed to handle the liquidation proceedings, and once the company is liquidated, its shareholders are protected from future claims.
  3. Bankruptcy: If the company is not solvent, bankruptcy proceedings will be initiated, which will lead to its closure.
  4. Voluntary liquidation: To voluntarily liquidate, all debts of the company should be paid, and the partners must sign a declaration to pay the debts at the time of the company's closing. If any debts remain or new debts arise, the partners will be held fully liable. There should also be no claims or lawsuits at the time of the company's liquidation.
  5. Compulsory liquidation: If the company fails to meet its legal obligations or pay its debts, it may be subject to compulsory liquidation, which is initiated by the court. A liquidator is appointed to handle the proceedings, and the company's assets are sold to pay its debts.
  6. Complete all accounting formalities before closing the company based on shareholders' statement.
  7. Declare the last period's VAT before deregistering.
  8. Make the last payment for employees and ensure that their taxes are declared, then deregister as an employer.
  9. Notify the tax office of the company's deregistration from the corporate income tax register (not necessarily the same as the closing date), and declare income tax by the last tax day.
  10. Obtain a certificate from the tax office that all debts have been paid, and draw up a statement confirming this, signed by shareholders.
  11. Submit a final application for closing the company, and wait up to two weeks for the final closing to be implemented.
  12. Close accounting and ensure that VAT and employee taxes are declared for the open months, dissolve any totals on Skattekonto, and deregister the company as an employer and as a VAT payer.
  13. File a tax return for the previous tax year on SKAT Erhverv, and a special manual tax return for the year of closure.
  14. Zero out all income tax totals, adjust tax payments for the current year to match actual income tax for the ending year, and pay the tax.
  15. Apply for a statement from the tax authority (betalingserklæring) and prepare a statement from shareholders, then close the company on VIRK.
  16. Forced dissolution:
  17. In Denmark, the court can order forced dissolution if the company has not filed its annual report by the deadline, the managing director resigns, or the company is due for an audit and the auditor resigns without appointing a new one.
  18. The court will appoint a liquidator to review the company's financial situation.
  19. If the company is insolvent, it will be put into bankruptcy proceedings, and if it is solvent, it will be dissolved.

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