Closing company with Payment Declaration
Should you decide to dissolve your business using a payment declaration, please note that this is a voluntary process. It involves a legal document that consists of a statement from all company owners indicating their intention to dissolve the business. The signed declaration must be submitted to the Danish Business Authority to officially terminate the company’s operations.
It’s important to note that although closing down through a payment declaration is the most straightforward and efficient method, all owners must agree to take this route. Additionally, not all companies are eligible to dissolve themselves through a payment declaration. The following criteria must be met:
The company must be one capital company ( ApS or A / S )
The company must not be indebted creditors
The company must not have debt to SKAT
Individual companies do not fall under capital companies, so a payment statement in this case is not possible.
Debt to creditors
It is not possible to close a payment declaration company if it still owes money to creditors – for both past due and unpaid debt. In short, this means that if money is borrowed from the company, then they must be repaid before you can receive a payment statement. When everything is paid and operations are stopped, the company has no more obligations. Should there still be assets in the company, these are transferred and distributed among the owners.
Debt to the public
The last criterion you should be aware of is public debt – including tax and VAT. These must also be paid. To prove this to the Danish Business Authority, you must obtain a so-called tax receipt, also called tax declaration, from SKAT. This documents that the company has no debt to the public.
You collect tax receipt by submitting a notification of the company’s termination to SKAT, in which you enclose the statement of the company’s final financial year. The notification must be made within one month of the company’s operation being stopped. However, you should be aware that it takes 4-5 months for SKAT to prepare a tax receipt.
Closing company with Liquidation
If the company is to be dissolved by liquidation, it is a process that takes longer than resolution by payment declaration. Below is the overview of the steps that a resolution in voluntary liquidation entails:
Voluntary liquidation decision
If the company is to enter into voluntary liquidation, this must be decided by the company’s owners at a general meeting. In this connection, the owners must appoint a liquidator. It is the liquidator who is then responsible for the company and its closure. It also means that the company’s management and auditor resign when the decision to dissolve by voluntary liquidation is adopted.
Notice to creditors
The liquidator must ensure that all creditors ( have money for the benefit of the company ) that the company has entered into liquidation. The company’s creditors will then have three months to submit claims for claims with the company. Notification is made partly by direct contact with known creditors and partly by notice in Statstidende.
Settlement of the company’s assets and creditors
Liquidator sells all of the company’s assets and pays all creditors who have money for the company. This process must run for a minimum of three months, as this is the period during which creditors can assert their claims. If there are claims from creditors that the liquidator will not approve, this must be clarified during this period. However, it is possible to pay advance payments to the company’s owners if these amounts are guaranteed.
Preparation of liquidation accounts
When all creditors are paid and it is possible to determine how the remaining profits should be distributed, a liquidation account must be made. The liquidation accounts are the company’s final accounts, which cover the period from the last annual report to the date of liquidation.
Final general meeting
Once the three months have passed, a final general meeting must be held, where the company’s owners must approve the final liquidation accounts and the liquidation of the liquidation. The company’s owners will then receive any profits from the liquidation ( liquidation proceeds ).
Once the above has been completed, the liquidator must register that the company is liquidated with the Danish Business Authority at Virk.dk. The company is then officially dissolved and closed.
Closing company with Forced Resolution
When a company is formed, various legal requirements are made, partly for the foundation and partly for the operation of the company. These requirements may vary depending on the type of company – ie whether the company is an ApS, IVS or A / S. If some of the more important legal requirements are not complied with, compulsory dissolution can become a reality. In these cases, the Danish Business Authority and the Skifterretten will have the opportunity to jointly dissolve the company. These are the following scenarios:
The company is not managed as required by law or in its own articles of association
The company is required to undergo audit but has not notified an auditor
The company has not submitted an annual report within the time limit
The company has lost part of the share capital
The company has not responded to lost outstanding capital
The company has not registered legal and real owners
The Danish Business Authority very rarely goes directly to forced dissolution. First, the Danish Business Authority sets a deadline within which the company has the opportunity to rectify the offense in question.
How is a forced resolution implemented?
In the event that the company fails to rectify the offense in question within the time limit given by the Danish Business Authority, a compulsory resolution may become relevant. In this situation, the Danish Business Authority will submit a request to the Probate Court for compulsory dissolution of the company. After that, it is the Court of Appeal that must decide how the compulsory solution should take place. The probate court shall convene a representative of the management of the company, who shall provide an explanation of the company’s assets, liabilities and what may otherwise be relevant. Based on his or her explanation, the probate court decides how to release the forced solution. Forced resolution can be done in three ways.
Formless resolution
This approach is typically used by the Probate Court if the company does not own any assets that can finance the company’s dissolution treatment or if no one wants to provide security for the housing costs. This means that the company will be dissolved without any further treatment. No legal fee is payable on this procedure.
Bankruptcy
If the company has assets of some value but cannot pay creditors as their claims mature, the Shifter usually dissolves the company through bankruptcy proceedings. The same happens if a creditor or others have secured the cost of living. The cost of bankruptcy proceedings is covered either by the company’s funds or in whole or in part by the state.
Liquidation
If the Probate Court considers that the company has assets of a value that can cover both the cost of dissolution and debt to creditors, the company is dissolved through liquidation. This approach is usually also used if the company has not disclosed all its assets and the Probate Court considers that the company has the opportunity to repay their creditors. The cost of liquidation is covered either by the company’s own funds, or in whole or in part by the state.
Consequences of the forced solution
If a company is under compulsory dissolution, the company’s management and any auditor will automatically resign. This ensures that both the Board of Directors and the Executive Board’s right to dispose of the company’s assets is limited and that they will not be able to make new commitments on behalf of the company.
Close your company with Payment Declaration by using DKkonsult
DKkonsult offers exclusively closing business with payment declaration – this is also the easiest and fastest way. We have outlined the necessary conditions that need to be fulfilled to close your company with Payment Declaration. All the process is made in 5 easy steps:
- Fill out the form.
- Sign the documents
- Our team of professionals will proceed with the documentation for SKAT.DK (Expected waiting time is 3 to 4 months to receive an answer from SKAT)
- Receive payment statement from SKAT, which you will need to sign and contact us immediately to proceed with the closure
- DKkonsult will register the closure of your company. (The official statement will be approved by Erhvervsstyrelsen within a few weeks)
That’s it – your company is officially closed.
When should the payment declaration be sent to the Danish Business Authority?
Please be advised that in order to dissolve your company, the signed payment declaration, which includes the personal addresses of all owners, must be submitted to the Danish Business Authority within a period of 14 days. It is imperative to enclose the tax credit along with the declaration as the resolution will not be approved otherwise. Kindly note that the dissolution of your company will only be considered final after the Danish Business Authority approves the declaration and registers the resolution in their IT system. Upon completion of the resolution, a receipt will be issued to you for your records.
Remember to unsubscribe TAX and VAT
When closing a business, remember to unsubscribe from all of the company’s obligations to the customs and tax administration. This primarily covers tax, VAT and employer obligations. However, if you choose to have DKkonsult dissolve your business, we will unsubscribe from everything for you.
Personal liability
Should it later prove that the company still owes money after its dissolution – for example a supplier that has never been paid – is liable to all the owners personally and jointly and severally for this debt. The fact that a personal liability means that the parties that are due to money can claim the owners’ personal wealth. At the same time, joint and several liability means that everyone in the ownership circle is liable for the debt on the basis of a “ one for all and all for one ” principle.
Example: Peter, Louise and Mads close their business, but subsequently find that they still owe DKK 100,000 to Kreditor A / S. The company has dissolved, which is why Kreditor A / S is seeking to fulfill its claim in Peter, Louise and Mads ’ personal assets. Creditor A / S requires DKK 33,333 from each of the three, but if neither Peter nor Louise pays, Creditor A / S can actually claim all DKK 100,000 from Mads.
Although equal payment of the debt has been agreed between Peter, Louise and Mads, Kreditor A / S should not respect this. Creditor A / S just needs his money and does not care who pays what – this is joint and several liability. After Kreditor A / S has received his money, Mads can then demand that Peter and Louise pay him DKK 33,333 if they have agreed to do so. But this has nothing to do with Kreditor A / S.
If you, as the owner of the company, have signed and submitted the statement knowing that there was still debt in the company, you and the rest of the owners can be punished with a fine or imprisonment for up to one year.
DKkonsult closes your business with a Payment Statement for you
It is no secret that it is a long and arduous process to close a business down – also with payment statement. That’s why Legal Desk offers to do it all for you for only 4,999kr. This involves the cancellation of duties, reporting to SKAT, obtaining a tax receipt and registration of closure with the Danish Business Authority.
Simply fill out our form, pay and send us the necessary information for us to obtain a payment statement – and we will manage the long process that follows!
We only close companies with a payment declaration and therefore it also requires that your company has no debt to neither creditors nor the public. You should also be aware that it takes SKAT 4-5 months to prepare a tax receipt, but we must make sure that we keep an eye on it.
Get started on shutting down your business today by pressing ‘ Close Business now ’ below.
