Conditional Legalization of Shareholder Loans - the Amending Law of December 13, 2016: Consequences of the Amending Law of December 13, 2016 from the Auditor's Perspective

Jennifer R. Haagensen

Student thesis: Master thesis


As of 1st January 2017, it was made legal for a shareholder to lend money from their company according to the Danish Companies Act. The change in the law regarding shareholder loans in the Danish Companies Act was made with the intentions of making it possible for companies to grant a loan to the shareholder legally. This was the intention because the Ministry of Industry, Business and Financial Affairs wanted to make the law equal to the laws in other European countries.
The purpose of this master thesis is to investigate the consequences of the new rules regarding SL §§ 210-212 on the financial statements of companies which annual report shows shareholder loan including the auditors experience with preparing the independent auditor’s report and compare the effect of the change
in law with the intentions behind the Danish Companies Act and the desired expectations on these.
To answer the research question from the accountant’s point of view, this thesis draws on data from a survey amongst accountants with questions related to the topics of the research question and data from interviews with accountants that are experts on the topic “shareholder loans”. The analysis of the data from the survey and the interviews are supported by a comparison of SL §§ 210-212 before and after the changes was made in the Danish Companies Act and other laws ang legislations regarding shareholder loans relevant are included to answer the research question discovered in other laws for example LL § 16.
The analysis confirms that the changes in the law regarding SL §§ 210-212 has had the consequence that companies now legally can lend money to the shareholder etc. if the terms according to SL § 210 is met but the experience on the use of this is very low amongst the accountants because of the fact that many does not know that the possibility even exist and on top of that are the issues regarding the objective of LL § 16 E that makes it very difficult and problematic to use the new guidelines in SL § 210 because of the tax law and LL § 16 E are so complicated and does not act together with SL § 210.
Because the guidelines in SL § 210 and the guidelines in LL § 16 E does not act together accountants experience that many shareholders etc. have difficulties with understanding the laws and obeying the rules which have consequences that includes double taxation and supplementary information in the independent auditor’s report regarding non-compliance with tax law. In addition to this there is a negative view on shareholder loans amongst the stakeholders and in the society in general. This means that the changes in SL §§ 210-212 does not seem to have had the wanted effect that was desired by the authorities when they changed the Danish Companies Act.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2020
Number of pages81