[ESTABLISHING A BUSINESS ENTITY IN DENMARK]
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the Danish Business Register which often occurs by random sampling, the CVR-no. may take approximately one (1) week to receive. It is possible to buy an “of the shelf” company, which is already registered but taking the quick online registration into consideration, this possibility is very rarely used. 2.2 Sole Proprietorship (Enkeltmandsvirksomhed) When establishing a Sole Proprietorship there are no formal requirements for the establishment. The entity can be notified to the Danish Business Authority in order to receive a CVR-no. but the notification itself does not have any legal effect. After notifying the Danish Business Authority the Sole Proprietorship will receive its registration number (CVR-no.). The owner of the Sole Proprietorship is the tax subject of the entity and the income, and the deductions shall be registered in the owner’s income tax return. The Sole Proprietorship must register for paying Danish VAT, if selling goods or services. 2.3 Partnerships (I/S, K/S, P/S) The Partnership (I/S) is established by an agreement of establishing a business between the partners. There are no formal regulation concerning the agreement. The partnership is not regulated by the Danish Company Act, which means it is highly recommended, to have a partnership agreement which regulates the terms of the partnership. The partnership can be notified to the Danish Business Authority in order to receive a CVR-no. but the notification itself does not have any legal effect. If the Partnership is owned by two legal entities the partnership will be registered in the business register with legal effect. The Partnership will receive its registration number (CVR-no.) hereafter. The owners of the partnership are the tax subjects of the Partnership and the
income, and the deductions shall be registered by the owner in the owner’s income tax return. The Limited Partnership (Kommanditselskab – K/S) is established by a Limited Partnership Agreement. The capital contribution from the Kommanditist can be cash or assets. It is not a requirement that the company capital has been contributed before the formation of the Limited Partnership. The Komplementar must have some administrative powers such as signing for the company, veto rights and economic rights such as receiving payment or dividend due to the liability. The partnership must be notified to the Danish Business Authority but the notification itself does not have any legal effect. The partnership will receive its registration number (CVR-no.) hereafter. If the Partnership is owned by legal entities the Limited Partnership will be registered in the business register with legal effect. The Partnership Limited by Shares (Partnerselskab – P/S) is established by establishing a new or a converted existing Public Limited Company to a Partnership Limited by Shares. The Kommanditistaktionær must at least contribute at least 400,000 DKK to the share capital in cash or assets. It is possible if the contribution is in cash, to only contribute with 25 % of the share capital, just as the Limited Companies. The Komplementar does not have to contribute with cash or assets. The founders of the Partnership Limited by Share must sign a memorandum of association that states who the Komplementar is and articles of association. The Komplementar must also have some administrative powers which could be appointing a member of the board and economic rights such as receiving payment or dividend due to the liability. The documents must be submitted to the Danish Business Authorities with the application for registration of the company within two (2) weeks after the
ILN Corporate Group – Establishing a Business Entity Series
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