In order to close an ApS or IVS, you first need to decide on a strategy.
The strategy you choose, will mainly depend on the financial situation of the company, and also on your own personal preference, in terms of either making a closure that is considered “by the book” (the nice way), or if you want to simply force a closure upon the company (the bad way). The latter considered a more “dirty move”. Finally there can be a situation, where the closure is initiated by the court, and then the decision of course, is out of your hands. This happens when the company has failed to pay one or more of its obligations, and a creditor has asked the court, to help retrieving his or hers money. If the court then finds, that there is not enough money to pay the creditor, then a bankruptcy will be initiated.
Generally speaking there are 2 situations, when closing a company
1: When the company does not have enough money to pay its obligations
2: When the company has enough money to pay its obligations
Therefore ask yourself first, what situation your company is in.
If you want to close the company in a “nice way”, and find yourself in situation 1, then you need to allocate more ressources (money) to the company first, so you can start paying of all the debts, prior to closing the company.
Once the debts have been paid, then you can start closing the company.
At the time of closure, you and the other shareholders (if any), will sign a statement that all debits has been paid. It also will mean, that you are personally liable later on, in case debts was not paid after all. So it is not smart just to pretend, that everything has been paid. Should something popup later, you will need to pay yourself. It also goes for potential lawsuits and future obligations, that you might try to avoid by making the closure. So think carefully before choosing the “nice way”. Things have to be calm and debts paid, and there should be no potential lawsuits or claims in the holrizon. If there is, you are usually better of closing the company in the “bad way”, where a court makes a forced closure. This will secure yourself better, in terms of your private obligations.
If you find yourself in situation 2, then the next step is up to you. The considerations are still the same in terms of future lawsuits and claims.
Make sure nothing is waiting for you in the horizon. If the coast is clear, and all debts is paid, then you can close the company in the “nice way” – or “by the book” as we also say.
Closing a company “by the book”
The first step to close a company “by the book”, is getting all the accounting done, up until the day, where you want to close the company.
When the accounting is done, then the VAT can be declared for the last period.
And after this, the VAT registration needs to be cancelled.
If you have employees, that last salary needs to be done as well, and you need to make sure that all employee taxes has been declared for all periods.
The company registration as an employer, also needs to be cancelled.
If you are registered for other obligations (f.ex. import/export/duties), then these also will need to be cancelled and all declarations needs to be submitted.
We then will inform the tax office what day, the company will close from a tax perspective.
This day is usually not the same, as the day where the company will close.
This is because we need first to declare the company income tax up until the last “tax day”.
After the company income tax has been declared, we then can retrieve a statements from the tax office, that all tax and VAT has been settled (once of course, you have paid all due tax and VAT).
This statement from the tax office can take 3-6 months to get, after we submit a request.
So the whole closure process is quite long.
Once we have the statement from the tax office, we then will make a statement that you and the other owners need to sign, stating that all debts has been paid in the company.
When this is signed by everyone, we can submit the final request to close the company at the Danish Business Auhority.
The closure is usually a reality 1-2 weeks after we submit the documents.
Checklist for the closure
Here are the steps for a closure:
Step 1: Check that you have all invoices and bank statement until the day of closure.
Step 2: Finish the accounting up until closure date.
Step 3: Declare VAT for all open periods.
Step 4: Check that employee taxes are declared – if you see any “FF” amounts in Skattekonto these needs to be solved.
Step 5: Deregister for VAT and as employer.
Step 6: Make the tax declaration for last year on SKAT Erhverv. And for the current year (the closing year) make the special manual PDF tax declaration (“ophørende selvangivelse”). If tax is payable, make sure to change the tax payment for the current year, and pay the remaining tax now.
Step 7: Apply for the payment confirmation (“betalingserklæring”) from the tax office.
Step 8: Write the shareholders about their payment confirmation (“betalingserklæring”)
Step 9: Close company on VIRK when you have both the payment confirmation for the tax office and shareholders.
Initiating a closure using the “dirty move”
If you are in a situation, where you want to initiate a closure through bankruptcy, but your creditors are not pushing you or at least it seems like it will take too long time (if you want to see some action now), then you can consider to let the managing director resign.
By doing this, the government will have to initiate a forced closure within a short period of time.
A laywer will be appointed as a curator, and will manage the forced closure.
The downside here is, that from the time where the managing director resigns, you are not allowed to make any actions in the company. This includes paying bills and making decision for the company. All this you will leave in the hands of the curator. This can sometimes be annoying, but if you are 100% sure, that this is the way the company is going (towards a bankruptcy), then it is a fast way to get the process started.
The whole process however can the years, before the company is actually closed.
But it will give you some peace of mind in terms of your creditors, since you are able to refer them to the curator (and the pending bankruptcy), when they start pushing you for payments.
Closing a company through a bankruptcy
If your ApS or IVS is unable to pay all of its obligations to the bank, tax office, loans, suppliers etc., then you will be unable to dissolve the company without declaring bankruptcy.
A bankruptcy can be initiated in several ways, but most often a company would fail to repay a loan or a supplier, which then would ask the court to help getting the money.
Once the case would go to court, and it becomes apparent that the company does not have money to pay its debt, then the court would declare a bankruptcy for pending.
As part of this step, the managing director would be removed and a curator appointed (a lawyer).
From then on all decicions is made by the curator.
The managing director and owners will no longer be able to access the bank account, and also they are unable to make decision on behalf of the company.
All actions is decided by the curator.
The mission of the curator is to secure the best interests of the company, making sure that as many creditors gets paid as possible.