Dissolving a business in Denmark

Shutting down a company is a complicated procedure that consists of multiple steps. We will assist you throughout the process to ensure you fulfill all requirements in line with Danish laws. It is important to carefully follow each step. This approach will help you retain access to online systems and prevent future tax, customs, or fee liabilities.

It's important to keep in mind that if the entrepreneur chooses to reopen the company, they will be assigned the same CVR number as before.

What is the process for closing a business in Denmark?

Closing a business is a significant process that demands thorough planning and execution. Whether due to financial reasons or a strategic decision, this process entails numerous formalities and legal requirements that must be completed in accordance with Danish law. In Denmark, closing a business involves following various administrative and legal steps. Below is a summary of the procedure:

• Checking outstanding liabilities - checking for liabilities is crucial to ensure that the business has no unresolved debts to customers, suppliers, employees, or government agencies (such as tax authorities).
• Decision to dissolve - the decision to shut down the business must be officially approved by the partners in the case of a company, or by the owner in the case of a sole proprietorship.
• Informing the appropriate authorities - he decision to dissolve the company must be communicated to the relevant institutions:
  a). The Tax Authority (SKAT)
  b). The Central Business Register (CVR)
• Notification to the Danish Business Authority (Erhvervsstyrelsen) - companies must inform the Danish Business Authority (Erhvervsstyrelsen) about the liquidation. This notification can be made online via the Erhvervsstyrelsen platform.
• The process of liquidating a company - the company liquidation process involves:
  a). Creating a liquidation balance sheet.
  b). Carrying out a liquidation audit, if necessary.
  c). Allocating the remaining assets after all liabilities have been settled.
• Announcement of business closure - once the liquidation process is complete, the business closure must be notified to the Danish Business Authority (Erhvervsstyrelsen).
• Keeping records - retain all documents related to the business operations for the mandatory duration as per Danish regulations, which is usually 5 years.
• Additional tasks - make sure all tax liabilities are settled and paid, and notify suppliers, customers, and business partners about the business closure. Furthermore, company bank accounts need to be closed.

What is the process for closing an ApS company in Denmark?

There are several reasons a company may be closed. The decision to cease operations can be made either by the owner or independently of their involvement.

Reasons for business liquidation in Denmark include:

• A voluntary decision by the partners to close the company
• Court-ordered liquidation
• Corporate restructuring
• Insolvency proceedings initiated by either the company or its creditors
• Closure of the company through a declaration by the partners.

A company can be voluntarily liquidated if it is solvent, meaning its assets surpass its liabilities. The liquidation must be publicly announced, providing creditors with a minimum of three months to submit their claims.

Company liquidation without the owner's participation is typically initiated by court orders. This can occur due to:

• Missing the deadline for submitting the annual report,
• The resignation of the Managing Director,
• Failure to conduct a mandatory audit caused by the auditor’s resignation and the absence of a replacement.

When a company is ordered to dissolve by a court ruling, a liquidator is appointed to evaluate its financial status. If the company is found insolvent, bankruptcy proceedings will commence. If it is determined to be financially solvent, the company will proceed with closure.

Restructuring serves as an alternative to bankruptcy proceedings. A court-appointed restructuring officer is assigned to supervise and manage the process.

A company must initiate legal proceedings before declaring bankruptcy. Bankruptcy can be filed by either the company itself or its creditors, with the primary cause being a loss of financial liquidity.

Dissolving an ApS company, like voluntary liquidation, can be a lengthy process. When closing a company based on a shareholders' declaration, there is no requirement to wait three months for creditors to file claims. However, neglecting necessary obligations can lead to debts that shareholders will be responsible for repaying. It is therefore essential to complete all formalities and ensure that taxes and business liabilities are fully settled.

How can we assist with closing a business in Denmark?

Whether it’s a company or a sole proprietorship, we manage all critical stages of the closure process, including:

• Ensuring access to digital mail post-closure - After the company is closed, NemID is deactivated, resulting in the loss of access to Digital Post. Despite this, messages may still be sent to the company’s digital mailbox. To maintain access, it is essential to properly configure the system before closure, enabling continued use of the digital mail even after operations cease.
• Reviewing the company’s tax account - Before closing, log in to the Skattekonto to verify the status of reports and payments. This ensures all obligations are up to date and helps prevent overpayments, such as VAT or A-skat, after the business has ended.
• Filing the closure form - This step involves formally closing the company and obtaining a closure certificate, which may be required later by entities like banks or unemployment insurance funds.
• Settling outstanding tax obligations - Ensure all reports for periods before closure are submitted on time, as delays may incur penalties of up to 800 DKK. A final report must be filed even if the amount owed is 0 DKK. Taxes, VAT, wages, payroll, excise duties, and other contributions must be fully settled before closure.
• Correcting the tax return post-closure - Adjust the company’s tax return to accurately reflect profits and ensure compliance with future tax obligations.
• Submitting the Oplysningsskema form and preparing the tax balance - Calculate the company’s profit and loss and file the tax declaration for the period up to the closure date. The balance should include assets removed or sold, such as computers, inventory, furniture, vehicles, or machinery. Note that the Oplysningsskema results can only be filed in the year following the closure, with a deadline of July 1. Delays can result in fines of 200 DKK per day, up to a maximum of 5000 DKK.