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The Danish entrepreneurial company type will expire – learn how you can convert yours

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calendar 15 September 2021
globus Denmark

The entrepreneurial company type expires on 15 October 2021. If you have an entrepreneurial company that you want to continue operating, it is necessary to convert it into another company type. In order to convert an entrepreneurial company, a general meeting must be held, among other things, and it will often be necessary to raise the share capital. In this newsletter, IUNO guides you through the process.

The deadline for conversion for an IVS is 15 October 2021. If an IVS is not converted or closed before the deadline, the company will be sent to compulsory dissolution by the Danish Business Authority.

How to transform an IVS

Before initiating the conversion of your IVS, you need to decide on a company-type. You can transform an IVS into a private limited company (ApS) or a public limited company (A/S). Once you have decided which type of company you want, you must hold a general meeting. At the general meeting, the following must be agreed upon

  • That you want to convert the company;
  • That you approve of the reviewed articles of association as a result of the conversion;
  • If applicable, that you will increase the share capital; and
  • Any other mandatory items that have to be on the agenda according to the articles of association of the IVS.

Decisions at the general meeting

There are no formal requirements for how the decision to convert the company is made. However, it may be necessary to be particularly thorough when approving the company's new articles of association. The wording of the articles of association must be updated so that any characteristics of an IVS are corrected to reflect the new company type.

It will often also be necessary to update the articles of association on the size of the share capital.

After the general meeting, you must register the conversion with the Danish Business Authority.

If you do not meet the deadline, the company will receive an inquiry from the Danish Business Authority with a deadline to either convert or dissolve the company. If the company has not been converted or dissolved, it will be sent for compulsory dissolution by the probate court.

Increase in share capital

An IVS can have a share capital of as little as DKK 1. For an ApS and an A/S, higher minimum requirements apply to the size of the share capital. An IVS can have a share capital of as little as DKK 1. For an ApS and an A/S, higher minimum requirements apply. For an ApS, the share capital must be at least DKK 40,000, and for an A/S, it must be at least DKK 400,000. Therefore, if a company is to be transformed from an IVS into an ApS or A/S, it may be necessary to increase the company capital.

IUNO's opinion

Owners of an IVS should, as soon as possible, decide whether they want to convert or close their company. If the company is to be converted, IUNO recommends that you begin the process well in advance of the deadline of 15 October 2021. This ensures that you have plenty of time to register the conversion with the Danish Business Authority and can remedy any shortcomings in the request before the deadline.

If you are converting an IVS, you can consider whether you also want to make other changes to the articles of association in this connection so that you can save an extra registration fee at the Danish Business Authority. You just have to remember that all the amendments to the articles of association must be adopted before the deadline.

It can be an advantage for smaller companies that you do not have to hold the general meeting physically. It is still important to remember to follow the rules that apply under the existing articles of association. Otherwise, you can risk that the changes will be deemed invalid.

[Bill on the amendment of the company law and the law on authority for temporary derogation of companies' duties concering company and accounting matters in connection with Covid-19 of 29 December 2021]

The deadline for conversion for an IVS is 15 October 2021. If an IVS is not converted or closed before the deadline, the company will be sent to compulsory dissolution by the Danish Business Authority.

How to transform an IVS

Before initiating the conversion of your IVS, you need to decide on a company-type. You can transform an IVS into a private limited company (ApS) or a public limited company (A/S). Once you have decided which type of company you want, you must hold a general meeting. At the general meeting, the following must be agreed upon

  • That you want to convert the company;
  • That you approve of the reviewed articles of association as a result of the conversion;
  • If applicable, that you will increase the share capital; and
  • Any other mandatory items that have to be on the agenda according to the articles of association of the IVS.

Decisions at the general meeting

There are no formal requirements for how the decision to convert the company is made. However, it may be necessary to be particularly thorough when approving the company's new articles of association. The wording of the articles of association must be updated so that any characteristics of an IVS are corrected to reflect the new company type.

It will often also be necessary to update the articles of association on the size of the share capital.

After the general meeting, you must register the conversion with the Danish Business Authority.

If you do not meet the deadline, the company will receive an inquiry from the Danish Business Authority with a deadline to either convert or dissolve the company. If the company has not been converted or dissolved, it will be sent for compulsory dissolution by the probate court.

Increase in share capital

An IVS can have a share capital of as little as DKK 1. For an ApS and an A/S, higher minimum requirements apply to the size of the share capital. An IVS can have a share capital of as little as DKK 1. For an ApS and an A/S, higher minimum requirements apply. For an ApS, the share capital must be at least DKK 40,000, and for an A/S, it must be at least DKK 400,000. Therefore, if a company is to be transformed from an IVS into an ApS or A/S, it may be necessary to increase the company capital.

IUNO's opinion

Owners of an IVS should, as soon as possible, decide whether they want to convert or close their company. If the company is to be converted, IUNO recommends that you begin the process well in advance of the deadline of 15 October 2021. This ensures that you have plenty of time to register the conversion with the Danish Business Authority and can remedy any shortcomings in the request before the deadline.

If you are converting an IVS, you can consider whether you also want to make other changes to the articles of association in this connection so that you can save an extra registration fee at the Danish Business Authority. You just have to remember that all the amendments to the articles of association must be adopted before the deadline.

It can be an advantage for smaller companies that you do not have to hold the general meeting physically. It is still important to remember to follow the rules that apply under the existing articles of association. Otherwise, you can risk that the changes will be deemed invalid.

[Bill on the amendment of the company law and the law on authority for temporary derogation of companies' duties concering company and accounting matters in connection with Covid-19 of 29 December 2021]

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