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Coming into force of the remaining part of the Companies Act(Taxwatch (Tax news in english)) 

On September 16, 2010 the Danish Companies Register has published news revealing when the remaining provisions of the new companies act is expected to come into force.

Expected effective date on phase 2 in the new companies act
Phase 1 of the new companies act came into force on March 1, 2010.

It derives from the companies’ act that different parts of the law can become effective on different dates gradually when the necessary IT changes has been implemented in the companies Register. Some of the IT changes in mind are among other and IT based statute template and electronic establishment of companies.

On September 16, The Companies Register has published news that a number of these IT changes now is about to be in place. This makes it possible that phase 2 of the law is expected to come into force as of March 1, 2011.

The IT based owners register has longer prospects
It is expected that the IT based owners register cannot be implemented as of March 1, 20011 as the owners register requires the establishment of a completely new IT system. The implementation of this register has according to the Companies Register a time horizon of at least 2-3 years. Until the public owners register is in place, shareholders holding over 5 % of the share capital in a company must notify their ownership of the company, which then on request has an obligation to inform the public on major shareholders. Also article 74 in the law on annual accounts on major shareholders information are still in force until the IT based owners register has been established.

What is expected to be in phase 2
From the news from the Companies Register it can be derived that the coming into force of phase 2 of the new companies act is expected to comprise the below possibilities and changes:

• Possibility to establish companies with pointing forward effect

• Possibility to insert a decisive share capital into another company retroactively

• Possibility to avoid to prepare a valuation report in connection with contributions and distributions of quoted receivables and assets measured to realizable value

• Possibility of postponed payment of share capital

• IT based statute templates

• Automatic accomplishment of decided capital reduction 

• Reduction of the time limit for accomplishment of capital reduction from 3 months to 4 weeks

• Possibility to opt out merger plan/split plan in private limited companies

• Possibility to omit creditor statement in mergers and splits

• Possibility to offer legitimate “self financing”

Particular circumstances for the chosen coming into force date
The particular background for the effective date March 1, 2011 is according to the Companies Register that an essential change of the Bankruptcy Act was passed in June 2010 also involved that a number of IT changes have to be made. This coheres with that the new rules legalizes a whole new form of registration and publishing in the Companies registers IT system.

The changes of the Bankruptcy Act among other contain rules on restructuring which aims to improve the possibilities to continue entities in economic difficulties instead of going into bankruptcy. On the other hand the rules on suspension of payments lapse when the new rules come into force. The rules also involve that a new kind of registration in the Companies Registers IT system must take place including registration of auditor as supervisor.

Questions regarding the above can be addressed to Hans-Henrik Nilausen at hhn@bdo.dk