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Denmark Company Liquidation


A  limited  company  and  other  legal  entities  can  be declared  bankrupt,  or  may  enter  into  solvent  liquidation. Upon completion of the bankruptcy proceedings  or  liquidation,  the  legal  entity  ceases  to exist. To avoid bankruptcy, a company may seek an arrangement with its creditors.


A limited company or any other legal entity with financial problems can seek an arrangement with its creditors to avoid bankruptcy.

In order to have time to investigate the possibilities of an arrangement, the company – or any other legal entity – can decide to suspend their payments for a period by giving notice to the court and the creditors.

When receiving such notice the court will immediately appoint a supervisor to watch over the interests of the creditors.

The company – or any other legal entity – may offer their creditors a voluntary composition if all creditors can accept the offer.

In such a situation where not all creditors will accept a voluntary composition, a composition approved by the  court  may  be  enforced  on  the  minority  of  the creditors by the majority of the creditors.


A petition for bankruptcy can be filed by a creditor or by the company – or any other legal entity – itself.

The bankruptcy decree is declared by the court upon a hearing if the court is satisfied that the company is insolvent. A company is insolvent when it cannot pay its debts by their due dates and when this inability to do so is not just temporary.


When  issuing  a  bankruptcy  decree  the  court  will appoint a receiver/trustee of the bankruptcy estate.

The receiver is the only person entitled to represent the  bankruptcy  estate  and  is  obliged  to  realise  all the company’s assets. In co-operation with the major creditors the receiver may decide to carry on the business of the company for a limited period.

The  receiver  investigates  the  causes  of  the  bankruptcy, examines whether the company has violated the law and audits the company’s books.

When all assets are realised, all outstanding issues solved and the claims have been approved, the receiver will prepare the accounts of the bankruptcy estate. Upon the approval of the court (and the creditors) the receiver will pay out dividend payments in the order of priority of the creditors and the company ceases to exist.

Scope of responsibilities

The partners or the board members and managing director shall assist the receiver and inform him of all the company’s assets and debts.


The owners of a company can decide for the company to enter into solvent liquidation. The owners will choose a liquidator to be in charge of the company.

Furthermore the court can decide for a company to be taken into solvent liquidation upon request from the  Danish  Commerce  and  Companies  Agency.  In this instance a liquidator is appointed by the court.

The liquidator shall make sure that all out-standing creditors are paid, and distribute the remaining assets  to  the  owners,  upon  which  the  company  shall then be dissolved.


A dispute may be settled in court or by arbitration.

Arbitration clauses can be common in business-tobusiness  agreements.  Undisputed  claims  may  be quickly settled by a summary procedure.

Litigation and arbitration

Arbitration  can  be  widely  used  in  the  commercial arena in Denmark. Many business-to-business agreements  can  include  an  arbitration  clause  and will  also  be  common  in  standard-form  contracts.

Most  of  the  arbitration  proceedings  shall  be  conducted in accordance with the Danish Act on Arbitration and the Danish Institute of Arbitration.

In the event the parties in dispute have not agreed to settle the matter by way of arbitration, the dispute shall be resolved in court. The court may assist the parties in reaching a settlement of the dispute and may  also  appoint  a  mediator.  If  the  parties  cannot reach a settlement, the court will resolve the matter.

Arbitration and court proceedings are normally instituted  by  written  submissions  from  both  parties followed by a preliminary hearing. Written preparation of the case may, if necessary, continue after the preliminary hearing. Once the case is prepared the arbitrators,  or  the  court,  will  hear  the  case  at  a  final hearing. The arbitrators, or the court, shall then pass  their  judgment.  If  the  case  has  been  tried  by the court, the party who is dissatisfied may appeal the judgment. One of the major differences between arbitration and court proceedings is that court proceedings  are  normally  conducted  in  public  while arbitration shall be private. In addition, arbitration shall usually provide a quicker and more expedient way of dealing with a dispute than court proceedings do, because the parties cannot appeal the decision of the arbitration tribunal.

Arbitration can, however, be more expensive than a court action, because the parties would be responsible also for the fees of the arbitrators.

We  hope  that  the  information  in  this  guide  has proved useful in providing a brief overview on how to  establish  a  business  in  Denmark,  the  options available to companies and their rights and obligations when conducting business in Denmark. Should you require further information with regard to any of the matters dealt with in this guide or if you have specific concerns or questions, please do not hesitate to contact us.


If you wish to register a company in Denmark our team will be happy to help you there and provide you with more detailed information, you can contact us at [email protected]


Denmark company Liquidation

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Establishing Business in Denmark

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Denmark Employment

Property and Environment in Denmark

Intellectual Property in Denmark

Danish Business Environment

Profit and tax in Denmark

Denmark Company Liquidation

Denmark company formation