Company Liquidation in Denmark
Company Liquidation in DenmarkUpdated on Thursday 17th January 2019
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How can a company be liquidated in Denmark?
There are two ways a company can be liquidated in Denmark: through solvent liquidation (decided by its members) or through compulsory liquidation (ordered by Court). The reasons why a company is liquidated in Denmark may vary, for example: if the members have reached the conclusion that the company has established its purposes, the availability term for it has expired, the failure in submitting the relevant documents to the Commerce and Companies Agency, the omission to appoint the managers and auditors, severe violation of the laws.
Our Danish law firm can tell you more information about the two types of company liquidation in Denmark.
The video below shows how to liquidate a Danish company:
What are the steps for company liquidation in Denmark?
Liquidation is an option for a company that is no longer profitable as long as that legal entity is able to settle all of the dents, including the final taxes, the costs for liquidation itself as well as most importantly the creditor’s claims, in their particular order. In those cases when this is not possible, and the liquidation process is already on the way, the appointed liquidator will file for bankruptcy.
In case of the solvent liquidation, the decision of closing the Danish company must be taken during a general meeting of the shareholders and the Commerce and Companies Agency must be notified no later than two weeks from the decision. Our Danish lawyers can take care of the relationship with the Commerce and Companies Agency.
The liquidator is the person in charge with the liquidation of a company established in this country and is appointed by the Court in case of a compulsory liquidation or by the members of the company is a case of a solvent liquidation.
The decision of closing a company is published in the Official Gazette and the creditors must be notified regarding the process and the way they can deposit their claims (usually a period of 3 months).
The first thing a liquidator must do is elaborating a balance sheet and a profit and loss account. These documents must be deposited at the Commerce and Companies Agency from Denmark.
The claims deposited on time must be paid and the remaining assets are used to cover the claims deposited after the period of 3 months and to the shareholders.
If the claims cannot be covered, a petition for bankruptcy must be deposited at the Commercial Court.
After covering all the claims and dividing the remaining assets to the shareholders of a Danish company, the liquidator must convene a new general meeting and a new balance sheet must be elaborated. During the general meeting, the shareholder is presenting the balance sheet and a report regarding its activities.
As a result, the liquidator is dismissed and a request for canceling the company from the companies register is made.
The solvent liquidation in Denmark can be revoked in certain situations. In this case, the share capital of the company established in Denmark must be increased or decreased in accordance to the settled minimum share capital and the Commerce and Companies Agency must be notified within two weeks from the resolution.
How long does it take to liquidate a company in Denmark?
Usually, the company liquidation in Denmark takes around six months if all the claims are covered in time and there are enough funds to support the process.
The liquidation process will differ according to the particular situation of the company and whether or not it is solvent or insolvent. We recommend reaching out to one of our company liquidation lawyers in Denmark for complete information about the process and legal counseling in your case. The liquidation procedures for private companies in Denmark are outlined in the Companies Act and one of our lawyers can offer you complete details about the legal proceedings, as they are indicated by law.
Contact our team of attorneys in Denmark for complete assistance in several corporate matters, including the dissolution of a Danish company.