Consolidation Act no. 546 of 20 June 1996
(At present in force)

 

The Danish Act on Undertakings
Carrying on Business for Profit
(Consolidation Act)
(Bekendtgørelse af lov om erhvervsdrivende virksomheder)

Arrangement of Sections

An act to consolidate Act no. 123 of 18 February 1994, as amended consequential on Act no. 377 of 22 May 1996.

Part 1 Scope and definitions

1.(1) This Act shall apply to undertakings whose objects are to promote the financial interests of the undertaking’s members through business carried on for profit.

(2) For the purposes of this Act, undertakings means sole traders, partnerships, limited partnerships, co-operatives (co-operative societies) and other limited liability businesses and societies to which the Companies Act (Aktieselskabsloven), the Private Companies Act (Anpartsselskabsloven) or the Act on Foundations Carrying on Business for Profit (Lov om erhvervsdrivende fonde) do not apply. Branches of similar foreign undertakings are also governed by this Act.

(3) Under this Act, an undertaking is deemed to carry on business for profit where it

1) passes on goods or copyright, provides services or the like for which the undertaking normally receives consideration, or

2) carries on business by selling real property or letting real property on rent, or

3) has the relationship with a public or private limited company set out in section 2 (2) of the Companies Act (see subsections (4) and (5) thereof) or with another undertaking carrying on the business set out in paragraph (1) or (2) above, or

4) exercises a dominant influence over another undertaking pursuant to statutes, bye-laws or articles or by agreement and has a considerable share in its operating profit or loss without having the relationship set out in paragraph (3) above with the other undertaking.

2.(1) For the purposes of this Act, a partnership means an undertaking in which all members are personally and jointly and severally liable, without limitation, for the debts and obligations of the undertaking.

(2) For the purposes of this Act, a limited partnership means an undertaking in which one or more members, the general partners, are personally and jointly and severally liable, without limitation, for the debts and obligations of the undertaking, whereas one or more members, the limited partners, have limited liability for the debts and obligations of the undertaking.

(3) Except for the provisions of Parts 1, 2 and 7, this Act shall not apply to sole traders, partnerships and limited partnerships.

3. For the purposes of this Act, a limited liability undertaking means an undertaking in which none of the members are personally and jointly and severally liable without limitation.

4. For the purposes of this Act, a co-operative (a co-operative society) means an undertaking governed by section 2 (1) or (2), or by section 3, whose objects are to help promote the common interests of the members through their participation in the business activities as buyers, suppliers or in any other, similar way, and whose profit, other than normal interest on the paid-up capital, shall either be distributed among the members in proportion to their share of the turnover or remain undistributed in the undertaking.

5.(1) This Act shall not apply to

  1. undertakings which have obtained approval pursuant to section 60 of the Act on Municipal Administration (Lov om kommunernes styrelse),
  2. undertakings governed by the provisions of the Merchant Shipping Act (Søloven) about shipping partnerships, and
  3. undertakings supervised by the Danish Financial Supervisory Authority (Finanstilsynet) or any similar supervisory authority within the European Union or in countries with which the European Union has concluded a co-operation agreement.

(2) The Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen) may determine that an undertaking or specific types of undertakings shall be exempt in whole or in part from the provisions of this Act.

 

Part 2 Name and powers of procuration of the undertaking

6.(1) For the purposes of this Act, the name of an undertaking means the name under which the undertaking exercises its business or any part of such business, and which is applied when signing for the undertaking.

(2) The names of undertakings shall differ clearly from each other. The name of an undertaking must not include surnames, names of companies, foundations or businesses, specific names of real property, trade marks, logos, etc., that do not belong to the undertaking, or anything which may be confused therewith.

(3) The name of an undertaking must not be likely to mislead. It must not include any specification of businesses which have no connection with the business activity carried on by the undertaking. If the name describes a specific business activity, it must not be used in an unchanged form if the nature of the business activity changes significantly.

(4) Partnerships, limited partnerships and co-operatives (co-operative societies) may use those designations, or abbreviations thereof, in their names. None others may use these designations, or designations which may be confused therewith.

(5) Where anyone retires as a liable member of an undertaking, his name may be retained in the name of the undertaking if the permission of the person concerned or his heirs has been obtained.

(6) The name of a limited liability undertaking shall contain information about the limitation of liability. The only abbreviation permitted for limited liability co-operatives shall be »A.M.B.A.«.

(7) The provisions of subsections (1) to (6) above shall apply correspondingly to the secondary names of undertakings. When secondary names are used, the principal name of the undertaking shall be added in brackets.

(8) A branch name of a foreign undertaking shall include the word »filial« (branch) and clearly indicate the nationality of the undertaking.

7.(1) Power(s) of procuration can be granted only by the fully liable member(s) or by the management body which, according to the statutes of the undertaking, have powers to do so. The person authorised to sign for the undertaking shall be entitled to do so in all matters pertaining to the operations of the undertaking and to bind the undertaking. The person authorised to sign for the undertaking shall not be entitled to dispose of or mortgage real property of the undertaking without being specifically authorised to do so.

(2) Powers of procuration may be granted to more than one person, to the effect that they can only be exercised jointly (joint powers of procuration).

(3) Powers of procuration cannot be limited with effect in relation to third parties, other than as provided in subsection (2) above.

(4) A person entitled to sign for an undertaking cannot transfer his power of procuration to another.

(5) Powers of procuration can be revoked from time to time. The death of the principal shall not lead to revocation of the power of procuration.

Part 3 Registration and legal personality

8. (1) The board of directors, management board or similar management body of limited liability undertakings (see section 3) shall deliver for registration particulars of the undertaking to the Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen).

(2) The branch manager of a branch of a foreign limited liability undertaking shall deliver for registration particulars of the branch.

9. (1) A limited liability undertaking which has not been registered with the Commerce and Companies Agency cannot acquire rights or incur debts and obligations as an undertaking, Nor can it be a party to legal proceedings other than lawsuits concerning its formation.

(2) Anyone who has incurred, before the registration, an obligation or has a share in such an obligation will be personally and jointly and severally liable, without limitation, for any such obligation incurred on behalf of the undertaking. Upon registration, the undertaking shall take over the obligations.

(3) If an agreement has been made before the registration of a limited liability undertaking, and if the other contracting party knew that the undertaking had not been registered, such other contracting party shall, unless otherwise agreed, be entitled to treat himself as discharged from all further contractual obligations if the particulars for registration have not been delivered prior to the expiration of the time limit set out in section 10 (2), or if registration is refused. If the other contracting party was unaware that the undertaking had not been registered, such party shall be entitled to treat himself as discharged from all further contractual obligations as long as the undertaking has not been registered.

Part 4 Delivery of particulars for registration, and publication

10. (1) The Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen) shall keep a register of undertakings which have been registered pursuant to this Act.

(2) Particulars for registration pursuant to section 8 shall reach the Commerce and Companies Agency not later than eight weeks after the formation of the undertaking or after the obligation to deliver particulars for registration starts to apply to the undertaking. The particulars delivered for registration shall include a copy of the undertaking’s statutes.

(3) In the register shall be entered information about the names and addresses of the members of the board of directors, of the management board or similar management body, and about which persons are authorised to sign for the undertaking. Information about the undertaking’s name, address, the municipality in which its domicile is situated and its financial year shall likewise be entered in the register. Where the undertaking is governed by section 18, the auditor’s name shall also be entered in the register.

(4) If the notification concerning the formation of an undertaking has not been delivered prior to the expiration of the time limit set out in subsection (2) above, registration cannot take place.

(5) Where an undertaking which has been entered in the Register of Associations (Registeret for Foreninger) under the Act on the Associations Register (Lov om Forenings-Registeret) is registered with the Commerce and Companies Agency under this Act, the undertaking shall be struck off the Register of Associations once publication under section 14 of this Act has taken place.

10 a. (1) The time limits fixed in or in pursuance of this Act shall be in force from and including the day after the day of the event that released the time limit. This shall apply to the calculation of time limits in terms of dates, weeks and years.

(2) Where a time limit is stated in terms of weeks, the time limit shall expire on the same day of the week as the day on which the event that released the time limit took place. See subsection (1) above.

(3) Where a time limit is stated in terms of months, the time limit shall expire on the date of the month on which the event that released the time limit took place. See subsection (1) above. If the day on which the event that released the time limit took place is the last day of a month, or if the time limit expires on a non-existing day of a month, the time limit shall always expire on the last day of a month, irrespective of the length of the month.

(4) Where a time limit is stated in terms of years, the time limit shall expire on the anniversary of the date when the event that released the time limit took place. See subsection (1) above.

(5) Where a time limit expires on a weekend, a public holiday, the Danish Constitution day (5 June), Christmas Eve or New Year’s Eve, the time limit shall be extended to the following weekday.

11.(1) If the statutes of the undertaking are altered or if any other circumstance changes, about which particulars have been delivered, such altered particulars must, in the absence of any provision to the contrary in this Act, be delivered to the effect that the Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen) shall have received them not later than four weeks from the date on which the alteration or change was adopted. If the statutes of the undertaking are altered as regards domicile, or if any changes are made to the board of directors, management board or similar management body of the undertaking, or if a new auditor is appointed, the Commerce and Companies Agency must have received such particulars within two weeks from a resolution to this effect has been passed.

(2) If an undertaking is no longer governed by this Act, see section 1 (1) and no solvent liquidation is undertaken, see section 20, particulars to that effect shall be delivered under subsection (1) above. The particulars shall enclose a declaration prepared by a state-authorised public accountant or a state-authorised registered accountant to the effect that the undertaking is undoubtedly solvent. The Commerce and Companies Agency shall strike the undertaking off the register once such a declaration has been received.

12. The Commerce and Companies Agency may demand any information necessary to determine whether this Act is being observed.

13.(1) Registration may be refused if the particulars delivered for registration are not in compliance with this Act, with the undertaking’s statutes or regulations made under this Act.

(2) Where the particulars delivered cannot be registered because of errors or omissions, the Commerce and Companies Agency may fix a time limit for rectification. Registration may be refused where no such rectification occurs within the time limit fixed.

(3) The applicant delivering the particulars for registration shall be notified in writing that registration has been refused and of the reason for such refusal.

14.(1) Registrations under this Act and receipt of a declaration pursuant to section 19 (6) shall immediately be published in the registration gazette. Registrations, declarations pursuant to section 19 (6) and particulars received, with exhibits, shall be available for inspection by the public.

(2) Third parties shall be deemed to have knowledge of anything which has been published in the registration gazette. The provision of the first clause of this subsection shall not be applicable to transactions which have been made prior to the 16th day following the publication if any third party proves that he has not had the opportunity to acquire knowledge of the published matters.

(3) As long as no publication has occurred in the registration gazette, matters which must be submitted for registration and which must be published cannot be contended in relation to third parties save where documentation is provided to the effect that such third party has had knowledge thereof. The fact that such matters have not yet been published, shall not prevent any third party from relying upon the matters.

(4) In the event of any disagreement between the contents of the publication in the registration gazette and the contents of the register of limited liability undertakings, the undertaking cannot rely upon the published text in relation to any third party. Such third party can, on the other hand, rely upon the published text in relation to the undertaking save where it is proved that the said party was familiar with the contents of the register.

15. The Agency may determine that registration and receipt of a declaration under section 19 (6) shall take place via the Agency’s computerised information system at the same time as or instead of in the registration gazette. Information published on the computerised information system shall be considered to have come to the knowledge of third parties and shall have the same legal effect in all respects as any publication in the registration gazette.

16.(1) The Commerce and Companies Agency shall stipulate rules relating to the delivery of particulars for registration, and registration, etc., under Parts 3 and 4. The Commerce and Companies Agency may stipulate rules to the effect that such particulars delivered for registration and any documents to be filed in connection therewith may be exchanged electronically, including be delivered to the Agency, in a standardised form as prescribed by the Agency. Such electronic documents are legally equivalent to paper-based documents. The Commerce and Companies Agency may stipulate rules as to which matters applicants delivering the particulars or others may themselves register in the Agency’s computer system, and as to the use of the system.

(2) Registrations made in accordance with the rules issued in pursuance of the fourth clause of subsection (1) above shall replace the filing of particulars for registration. Section 11 shall also apply to such registrations.

(3) The Commerce and Companies Agency may stipulate rules relating to fees for particulars delivered for registration, fees to be paid for transcripts, copies of documents relating to undertakings, publication and for the use of the Agency’s computer system. The Commerce and Companies Agency may stipulate rules relating to the payment of an annual fee for its receipt of annual accounts etc. and for their publication and for services for which no specific fees have been fixed. The Agency may stipulate fees for reminders in case of late payment.

(4) Following registration according to rules stipulated in pursuance of the second and fourth clauses of subsection (1) above, the Commerce and Companies Agency may up to five years from the date of the registration demand submission of documentation showing that the particulars delivered for registration or the registration is lawful. See section 13 (1).

17.(1) Where anyone believes that a registration is detrimental to him, the question of deleting such registration shall be decided by the courts of law. Actions to this effect shall be instituted against the undertaking within six months of the publication of the registration. The court shall send a transcript of its judgment to the Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen). A note concerning the outcome of the case shall be entered, free of charge, in the register of undertakings registered pursuant to this Act, and publication shall take place. See section 14.

(2) Other decisions made by the Commerce and Companies Agency under the provisions of this Act or regulations issued in pursuance of this Act may be delivered to the Company Appeals Board of the Ministry of Business and Industry (Erhvervsministeriets Erhvervsankenævn) not later than four weeks after the decision has been communicated to the relevant party.

(3) The decision made by the Commerce and Companies Agency pursuant to section 12 and decisions made as a consequence of the time limits stipulated in sections 10 and 13 relating to the fixing of time limits under section 13 (2) being exceeded, and decisions under sections 20 and 21 (1), may not be submitted to a higher administrative authority.

Part 5 Annual accounts and auditing of limited liability undertakings

18. The Consolidation Act on the Presentation of Financial Statements by Certain Companies (the Company Accounts Act) (Lov om visse selskabers aflæggelse af årsregnskab m.v., Årsregnskabsloven) shall apply to limited liability undertakings with any variations that might follow from the special circumstances of such undertakings. The Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen) shall stipulate more specific rules in that respect.

19.(1) Limited liability undertakings which, at the balance sheets date, do not exceed any two of the limits set out in subsection (2) below, may dispense with applying section 18.

(2) The limits referred to in subsection (1) above are

  1. total assets of DKK 4 million;
  2. net turnover of DKK 10 million; and
  3. an average number of 10 full-time employees during the financial year.

3) Subsection (1) above shall not apply where the undertaking is a member of a group, if any one of the members of the group or the group as a whole exceeds any two of the limits set out in subsection (2) above.

(4) Total assets under subsection (2) above shall be calculated as the sum of the items stated under assets or of the items stated under fixed assets and current assets, computed in compliance with the Company Accounts Act. The average number of full-time employees shall be calculated according to the regulations laid down pursuant to section 178 of the Companies Act (Aktieselskabsloven).

(5) Where an undertaking or a group, see subsection (3) above, is governed by the provision of subsection (1) above, that provision shall apply until any two of the three limits set out in subsection (2) above have been exceeded at the balance sheet date in three consecutive financial years. Where an undertaking or a group, see subsection (3) above, is not governed by the provision of subsection (1), that provision shall not apply until any two of the three limits set out in subsection (2) above are no longer exceeded at the balance sheet day in three consecutive financial years.

(6) Where an undertaking meets the conditions of subsection (1) above, see subsections (2) to (5) above, the board of directors, the management board or the similar management body shall make a declaration to that effect and such declaration shall be received by the Commerce and Companies Agency not later than six months after the end of the financial year.

Part 6 Dissolution

20. Part 14 of the Companies Act with any variations that might be required in consideration of the special nature of the undertakings shall apply to the solvent liquidation of limited liability undertakings.

21.(1) The Commerce and Companies Agency may decide that limited liability undertakings shall be dissolved by the insolvency court if the undertaking does not have the management prescribed by its statues, or if it fails to submit in due time to the Agency the declaration pursuant to the second clause of section 11 (2), or section 19 (6), or annual accounts, etc., in a form which accords with the Company Accounts Act and fails to remedy these defects prior to the expiration of a time limit determined by the Agency.

(2) Such compulsory dissolution shall be effected pursuant to the provisions of section 117 of the Companies Act with any variations that might be required in consideration of the special nature of the undertakings.

Part 7 Penalty provisions etc.

22. Where members of the board of directors, the management board or the similar management body fail to comply in due time with the obligations in relation to the Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen) imposed on them by this Act or by provisions determined under this Act, the Agency may impose daily or weekly fines on the persons concerned as a sanction, and execution may be levied to ensure payment of such fines without first obtaining the usual basis of enforcement.

23.(1) Unless a more severe penalty is applicable under the Criminal Code (Straffeloven), any person who violates the provisions of subsections (3); (4), second sentence; and (6) to (8) of section 6, and of sections 8, 10 (2) and sections 11 and 12 shall be liable to a fine.

(2) Regulations issued under this Act may provide for fines to be imposed on any violation of those regulations.

(3) Where a violation has been committed by a company, an association, a foundation or the like, the fine may be imposed on that legal person as a legal person. Where the violation has been committed by the State, a municipality or an inter-municipal establishment founded by local authorities according to a co-operation agreement, see section 60 of the Act on Municipal Administration (Lov om Kommunernes Styrelse), the fine may be imposed on the State, the municipality or the inter-municipal establishment.

Part 8 Commencement provisions etc.

24. The Company Accounts Act (Lov om visse selskabers aflæggelse af årsregnskab m.v.), see Consolidation Act no. 662 of 12 August 1993, shall be amended as follows:

1. Insert in section 1 a as subsection (4):

»(4). Partnerships and limited partnerships which are governed by subsection (1) shall be registered under section 8 and sections 10 to 17 of the Act on Undertakings Carrying on Business for Profit (Lov om erhvervsdrivende virksomheder). The Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen) may determine more specific rules as to which particulars shall be registered concerning these undertakings.«

2. Section 62 b (1) is repealed.

Subsection (2) accordingly becomes subsection (1).

25. (1) This Act shall come into force on 1 January 1995.

(2) At the same time Act no. 23 of 1 March 1889 on Registers of Business Names, Firms and Powers of Procuration (Lov om handelsregistre, firma og prokura) shall be repealed.

(3) Particulars and documents which have been registered with or notified for registration to the registers of business names not later than 31 December 1994 shall until 1 July 1995 be available for inspection with the provincial chief of police, in Copenhagen with the Corporation of Copenhagen.

26.(1) Particulars for registration of limited liability undertakings and branches of similar foreign undertakings which exist at the time when this Act comes into force, shall be delivered to the Commerce and Companies Agency (Erhvervs- og Selskabsstyrelsen) prior to 1 July 1995.

(2) Section 6 (6), first clause, and section 9 of this Act shall not apply to existing undertakings.

(3) Names of undertakings registered on or before the date of coming into force of this Act in the registers of business names, and particulars of which are delivered to the Commerce and Companies Agency for registration can, notwithstanding section 6 (2) be registered with the Commerce and Companies Agency and be used with the same rights as before.

27. A limited liability undertaking existing on or before the date of coming into force of this Act may apply the provisions of section 19 (1) to (4) provided that it, at the end of the first financial year commencing on 1 January 1995 or later, does not exceed any two of the limits fixed in section 19 (2).

28. (1) A limited liability undertaking which exists on or before the date of coming into force of this Act and is a parent undertaking may apply the provisions of section 2 c of the Company Accounts Act (Årsregnskabsloven) provided that the group, at the end of the first financial year commencing on 1 January 1995 or later, does not exceed any two of the limits fixed in section 2 c (1).

(2) A limited liability undertaking may apply the provisions of Part 9 a of the Company Accounts Act provided that it, at the end of the first financial year commencing on 1 January 1995 or later, does not exceed any two of the limits set out in those provisions.

(3) A limited liability undertaking existing on or before the date of coming into force of this Act may, for financial years ending not later than 31 December 1998,

  1. dispense with applying the provisions of the Company Accounts Act in respect of the calculation of and the statement in the balance sheet of depreciation of plant and machinery and other fixtures and fittings, tools and equipment,
  2. apply tax depreciation and write-downs and other valuations where this practice has hitherto been applied by the undertaking, subject to disclosure in a note to the accounts of the approximate amount by which such policy has affected the profit or loss for the year in relation to valuations pursuant to the Company Accounts Act.

(4) Where the purchase price or production cost of a fixed asset cannot be determined without unreasonable expenses or within a reasonable time when the first annual accounts are being prepared under or pursuant to the Company Accounts Act, the residual balance at the beginning of the year may be deemed to be the purchase price or production cost. Application of this provision shall be disclosed in the notes to the accounts.

(5) The corresponding amounts for preceding years may be left out in the first annual accounts prepared under or pursuant to the Company Accounts Act where adjustment of the figures of the annual accounts of the last preceding year can only be effected at considerable expenditure of money and time. Application of this provision shall be disclosed in the notes to the accounts.

29. This Act shall not extend to the Faroe Islands and Greenland but may by Royal Decree be extended to those parts of the Kingdom of Denmark subject to such modifications as circumstances peculiar to the Faroe Islands and Greenland may require.

__________

 

Act no. 377 of 22 May 1996

(Simplification of the Presentation of Accounts and Time Limits, the Second Phase of the Legislative Process in Respect of State Public Limited Companies and Electronic Exchange of Data) (Forenkling af regnskabsaflæggelse samt frister, 2. fase af lovgivningen vedrørende statslige aktieselskaber og elektronisk dataudveksling m.v.)

Contains commencement provisions such as:

14

Section 14 (1) provides that the Act shall come into force on 1 June 1996. From section 14 (2) it appears that provisions such as section 3 (9) which regards an amendment of section 19 (6) of the Act on Undertakings Carrying on Business for Profit (Lov om erhvervsdrivende virksomheder) shall have effect from 1 February 1996.

17

(1) This Act shall not extend to the Faroe Islands and Greenland.

(2) Sections 1 to 4 may by Royal Decree be extended to the Faroe Islands subject to such modifications as circumstances peculiar to the Faroe Islands may require.

(3) Sections 1 to 4 and 6 to 10 may by Royal Decree be extended to Greenland subject to such modifications as circumstances peculiar to Greenland may require.

Ministry of Business and Industry, 20 June 1996

Mimi Jacobsen

/Niels Henrik Englev

Notes:

None