Compulsory dissolution for failure to register beneficial owners
On 17 May 2018 certain bills were passed, intending to improve overall conditions for doing business in Denmark.
Among the amendments introduced are the following:
Consequences of failure to register beneficial owners
One significant consequence of the amendments is that registration of a company’s beneficial owners will be a precondition for registering new businesses. The change affects limited companies, limited liability undertakings (AMBAs., FMBAs and SMBAs), partnerships and limited partnerships that are subject to registration under the Danish Act on Certain Commercial Enterprises, and commercial foundations.
It also introduces the possibility of having bankruptcy courts commence compulsory liquidation proceedings against businesses whose beneficial owners are not registered. For partnerships and limited partnerships, registration with the Danish Business Authority is not a condition for carrying on business and they will consequently not be affected.
Based on the experiences of the Ministry of Industry, Business and Financial Affairs regarding registration of legal owners the amendment is aimed to make it easier to enforce the requirement of registering beneficial owners. It is, where a sanctioning by, for example, issuing fines was found to be disproportionally resource-demanding and troublesome.
Capital requirement for public limited companies relaxed
Also, there will be an amendment to the Danish Companies Act, reducing the statutory capital requirement from DKK 500,000 to DKK 400,000, which will make it easier to set up public limited companies and to transform private limited companies into public limited companies.
Entry into force
The amendments will enter into force on 1 July 2018.