A Private Limited Company (ApS) is the most common business structure in Denmark, appreciated for its flexibility and minimal capital requirements. This makes it an excellent choice for entrepreneurs and small owners who desire limited liability and an easy setup process.

Key Features of an ApS:

• Limited Liability: Owners are only liable for the capital they invest, protecting personal finances. The minimum share capital is DKK 40,000, and creditors can only claim the company’s assets, not personal ones.

• Independent Legal Entity: An ApS is a separate legal entity, with its own rights and obligations distinct from its owners.

• Flexible Ownership: Shares in an ApS are easily transferable, facilitating the addition of new investors or co-owners.

A Public Limited Company (A/S) in Denmark is a larger corporate structure often favored by established firms or those to raise significant capital. Unlike a Private Limited Company (ApS), an A/S requires a greater minimum capital investment and has a more complex governance structure.

Key Features of an A/S:

• Higher Capital Requirement: Establishing an A/S requires a minimum capital of DKK 400,000, a more substantial financial commitment than an ApS.

• Mandatory Board Structure: An A/S must have both a board of directors and an executive board, adding governance requirements not applicable to an ApS.

• Limited Liability: Similar to an ApS, owners are liable only for the capital they invest, ensuring personal assets remain protected from creditors.

• Enhanced Credibility: The higher capital threshold and formal governance structure convey stability and professionalism to investors, suppliers, and business partners.

A holding structure is not a separate legal entity; it describes a company (like ApS or A/S) mainly created to hold shares in other companies. It acts as a middle layer between you, the owner, and the business entity (also an ApS or A/S, for instance) that manages daily operations. Typically, you own the holding company, which then owns the operating company that carries out the actual business activities.

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Key Features of a Holding Structure:

• Limited Liability: As a separate legal entity, a holding company protects its owners’ personal assets from any liabilities incurred by the company. The extent of this protection depends on whether it’s structured as a Private Limited Company (ApS) or a Public Limited Company (A/S).

• Tax-Free Dividend Transfers: When a holding structure owns more than 10% of an operating company, dividends can be transferred to the holding company without incurring the typical 27%–42% dividend tax, significantly enhancing tax efficiency.

• Tax-Free Business Sale: Selling a business through a holding structure allows for a tax-free transaction, in contrast to personal sales, which are subject to capital gains tax. This structure can provide substantial tax advantages upon exit.

• Simplified Ownership Transitions: Holding structures streamline ownership changes, as retained profits remain within the holding entity. Additionally, tax-free dividends increase liquidity, making buyouts and transitions smoother and more cost-effective.