Valg af virksomhedsform: Ud fra skattemæssige og erhvervsretlige forhold

Line Søgaard Larsen & Anders Lund

Student thesis: Diploma thesis


This paper presents a case, in which a fictional company sells industrial equipment to other businesses. The owner of has asked for an assessment of whether or not his company would benefit from a change in type of business and tax form. presently run as a Proprietorship and taxed under the laws of Personal Tax. The owner, Torben, feels, that he lacks basic knowledge of the different forms of business, and is especially interested in information concerning Limited Companies and Personal Proprietorship taxed according to the Business Tax Scheme. To supply this knowledge, the paper offers a theoretical review of commercial law and tax aspects of a Personal Proprietorship taxed by the law of Personal Tax, a Personal Proprietorship taxed by the law of Business Tax Scheme and lastly Limited Companies as business form. Transformation of a Personal Proprietorship, taxed according to the Business Tax Scheme, to a Limited Company, is also covered. Based upon this, an analysis of commercial and tax laws in 2011 applying to Personal Proprietor-ship taxed under personal income tax and personal enterprise taxed by the law of Business Tax Scheme, respectively. Here, the tax environment for the business owner will be calculated, discussed and compared. Then follows an analysis of the impact of a tax-exempt business transformation from a Personal Proprie-torship taxed by the law of Business Tax Scheme, respectively to a Limited Company, and the company's opening balance is calculated. The analysis of the Limited Company is based on the ac-counts of 2012 and the commercial law and taxation of capital company as business form is dealt with. The tax ratio for capital owners is compared to taxation under law of Business Tax Scheme. The theory sections concludes that there is substantially more administrative requirements for oper-ating a personal enterprise taxed according to the law of Business Tax Scheme than there is by taxa-tion under Personal income Tax. Taxation under the law of Business Tax Scheme, however, gives somewhat similar fiscal conditions, to those that apply to Limited Companies. These advantages often outweigh the additional administrative costs. For example it is possible to equalize taxation by saving up surplus, whereas the company owner would be taxed by the full result of his enterprise under personal income tax regulations. A change in the form of business thus would allow the owner to avoid being taxed at top marginal tax rate. There are considerably more commercial law requirements for the formation of a Limited Company than the formation of a Personal Proprietorship. These demands require the assistance of an attor-ney. What primarily distinguishes a company from a personal enterprise is the company's liability. In a personal enterprise the owner is personally liable for the enterprise. In a Limited Company the shareholder is liable only to the invested capital. This protects the capital owner against creditors' claims. Since it is not possible to convert the Personal Proprietorship to a company in 2011, only taxation under the personal income tax and the law of Business Tax Scheme is analysed for 2011. The analysis concludes that in 2011 the most profitable for the owner is to change the tax form to the law of Business Tax Scheme because this would decrease his taxes. For 2012, it is analysed, whether it pays best to remain as a personal enterprise taxed under the rules of the law of Business Tax Scheme, or to transform into a Limited Company by rules of tax-free transformation of business form. The limited liability and protection against the claims of creditors is also considered as an important factor in its own right. In the transformation of into at Limited Company, the personal enterprise can be used as a non-cash contribution. Comparison of the taxation of Torben as employed director of the Limited Company and as owner of the personal enterprise taxed by the law of Business Tax Scheme, shows that there is no substan-tial difference in taxation of the payment of wages up to the threshold of top marginal tax rate. As employed director, however, it is possible to distribute dividends, and thus receive equity income of up to 48,300 kr. taxed at 28%. Based upon these analyses, the owner is recommended, to make a tax-exempt business transforma-tion of the personal enterprise in 2011 as a Limited Company with capital of 80,000 kr.

EducationsGraduate Diploma in Accounting and Financial Management, (Diploma Programme) Final Thesis
Publication date2012
Number of pages110