The Abolishment of Danish Entrepreneur Companies (IVS)

Sandie L. Hansen

Student thesis: Master thesis

Abstract

Introduction of LOV no. 445 means that the Danish entrepreneur company (IVS) was abolished in April 2019. The abolishment has had judicial consequences for the existing IVSs as well as future entrepreneurs. The subsequent adoption of L 82 has also had judicial consequences for the existing IVSs. This thesis seeks to uncover said consequences, primarily through the use of legal dogmatic analysis, where current law will be clarified, concerning both current IVSs and the entrepreneurs of the future, after the introduction of LOV 445 and L 82. The current IVSs have, after the adoption of L 82, received a transition period of 2.5 years, meaning they need to re-register their company as a Danish private limited company (ApS) or terminate it in other ways before 15-10- 21 to avoid forced termination. Existing IVSs need to meet the capital requirement of 40,000 DKK (5,380 EUR) in order to re-register as an ApS. Before the adoption of L 82 it was required that the equity of an IVS should be a minimum of 40,000 DKK (5,380 EUR) to conduct a re-registration. L 82 has resulted in the capital requirement being changed, so that it is now only necessary to deposit the remaining capital, following the rules of Capital Increase in KSL chapter 10. Two relevant options for existing IVSs, in order to achieve the capital requirement and thus the re-registration requirements, could be to activate development costs or recognition of investments according to the equity method. The abolishment of the IVS meant that after 15-04-19, entrepreneurs could no longer found a low capital requirement company in Denmark. With the abolishment of IVSs, Denmark now has the second highest capital requirement in Europe, which means that the Danish entrepreneurs are now disadvantaged, in terms of capital requirement, compared to other EU countries. If entrepreneurs of the future wish to run a business without personal liability, they are now required to either procure 40,000 DKK (5,380 EUR) or found a business in one of the EU countries that has lower capital requirements than Denmark and run a branch in Denmark. Such a branch is subject to the substantive rules of the country where the business is founded. The coming political negotiations, with regard to the capital requirement for ApSs, could have a significant impact on existing IVSs and the entrepreneurs of the future. The negotiations may result in a substantially lower capital requirement for the Danish ApS, which in turn could result in an easier re-registration for existing IVSs and ease the capital burden for future entrepreneurs.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2021
Number of pages82
SupervisorsTroels Michael Lilja