Skattepligtig eller skattefri virksomhedsomdannelse?

Martin Jørgensen

Student thesis: Master thesis

Abstract

This thesis is written to provide insight on the conversion of a personally owned company into a capital company. Many companies in Denmark are founded as personally owned companies and when those companies reach a certain size and generate a profit, it could be an opportunity for the owner of the company to consider converting the business into a capital company. This thesis provides an insight of the deferens between a personally owned company and a capital company. There are advantages and disadvantages by converting a personally owned company into a capital company. One of the most important advantages is that the business owner after the conversion, no longer have a personally liable for the debt in the company. There are two methods for converting a personally owned company into a capital company. The two methods are called the taxable and the tax-free business conversion. This thesis provides a theoretical insight of the two methods and the deferens between them. The taxable business conversion is based on the principle that a personally owned business can be converted into a company at the fair market value. This method releases taxation for the owner of the business and may therefore require a large amount of liquidity. The tax-free business conversion is based on succession principle and the capital company therefore enters the previous owner’s fiscal position. By using this method, the taxation is postponed until the owner of the capital company sells the shares received in the business conversion. This conversion is used, when the company can be converted into a capital company according to the Danish Company Reorganization Act. In order to carry out a conversion of a company, the company must be valued. The value assessment of the company is basic for the calculations of the conversion of the company. After a review of the theory of the two conversion methods and value assessment of the company, a fictive cases study will be included in the thesis to give insight in theory to practice.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2014
Number of pages79