This specific type of limited company is in Denmark called an Anpartsselskab – ApS. There is a "bigger" type of limited company that is called Aktieselskab – A/S and a "smaller one" called entrepreneurial limited company (Iværksætterselskab - IVS).
An ApS is a separate legal entity that has its own independent life. You might own all the shares in the company but it has its own life and you will an employee in the company.
The ApS is one of several business types you can choose when you want to run a business.
One of the advantages of a limited company compared to a sole proprietorship is that if your ApS accidentally owe a supplier money, the supplier cannot come after your personal money and values.
The supplier can go for all the values in the company but he cannot demand your house and personal assets as payment for his loss in your limited company.
If the company has borrowed money in the bank, the bank will probably require you personally to stand liable for the amount. If you do you will personally lose the amount guaranteed if things go wrong.
Do you have a sole proprietorship company and you are running a deficit, you can deduct the deficit from your earned income or your spouse´s income. In this way SKAT (Tax department) will to pay some of your losses because you will pay less tax.
Do you have an ApS you cannot deduct losses from your personal income.
The characteristics of an ApS are:
You can yourself register the ApS at the Business Authority but you must have prepared different things before you can register. Among other things, you must:
When you create an ApS it is probably an advantage at the same time to create a holding company.
It can be a bit difficult to keep track of the various steps in registering an ApS so you can buy to help setting up the formalities.
If you today use an accountant he will help you or you could contact a lawyer.
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