DANISH COMPANY LAW REFORM BILL Contents

Home , Aktieselskab, Anpartsselskab, Public limited company

INSIGHT

february 2009

Background 3

Overall structure of the Bill 4

Management of the limited liability company 5

General meetings 8

Formation 11

Share capital 13

Capital increase 14

Capital reduction, etc. 14

Restructurings 16

Branches 17

INSIGhT · danish company law reform bill · february 2009 Background

Increased globalisation and internationalisation have sharpened the demand for competitive framework conditions for corporate Denmark. In 2006, this demand spurred the Danish Minister for Economic and Business Affairs to set up the Company Law Reform Committee (Udvalget til Modernisering af Selskabs- retten) charged with the task of proposing a simplification of the overall regulatory framework for public limited companies (aktieselskaber) and private limited companies (anpartsselskaber) in Denmark.

The Committee featured a broad representation of participants taken from a number of ministries and interest groups. Monica Reib, lawyer and partner at Bech-Bruun, participated on behalf of the Danish Bar and Law Society.

The Committee was given the mandate to review Danish company law for the purpose of

– modernising and simplifying statutory content and language – creating enhanced flexibility for the individual companies tailored to suit their situation and needs – easing 'superfluous' requirements resulting, among other things, from over-implementation of EU directives. – bracing for technological advances, new EU initiatives, etc. – creating an atmosphere of greater openness

On behalf of the Committee, Bech-Bruun conducted an international, country-based survey comprising an extensive analysis of company law in 11 selected countries. The survey is available at the Danish Commerce and Companies Agency’s website: www.eogs.dk.

For the last two years, the Committee has been working on a report and a draft new Companies Act. The report (no. 1498/2008) went out for consultation on 26 November 2008. The Bill is expected to be introduced to the Danish Parliament in February 2009. The Bill will specify the effective date of the Act, which is expected to be 1 January 2010.

More information about the Committee, a press release, the report and the Bill are available at the Danish Commerce and Companies Agency’s website www.eogs.dk or at the Danish Ministry for Economic and Business Affairs’ website www.oem.dk.

INSIGHT · danish company law reform bill · february 2009 Overall structure of the Bill

Structure of the Bill The Danish Company Law Reform Bill proposes one significant change: a compilation of the Danish Public Companies Act (aktieselskabsloven) and the Danish Private Companies Act (anpartsselskabsloven). Moreover, the Bill introduces a building block model regulating the company types covered by the Act:

– The private limited company (anpartsselskab) – The public limited company (aktieselskab) – The publicly traded limited company (aktieselskab)

The building block model embodies the principle that each part of the Act starts by setting out the provisions applicable to any type of company. These provisions are then followed by the provisions solely applicable to, for example, public or private limited companies, and, finally, the Act provides any additional requirements for public limited companies with shares admitted for trading on a regulated market, or for state-owned public limited companies.

The aim of compiling the two acts into one is to clarify which provisions apply to private limited companies and to establish uniform rules for public and private limited companies, unless special circumstan- ces or EU directive requirements targeted towards public limited companies direct otherwise.

Definitions and concepts in the Bill Owing to the compilation of the Public Companies Act and the Private Companies Act, the Bill contains a range of introductory provisions defining some of the new concepts introduced in the Act.

Examples of new Danish concepts and definitions in the Bill1:

– Limited liability company (kapitalselskab) (public limited company (aktieselskab) and private limited company (anpartsselskab)) – Shareholder (kapitalejer) (shareholder in public limited companies (aktionær)/shareholder in private limited companies (anpartshaver))

1 It is noted that the introduction of the new concepts and definitions in the Danish Companies Act will only to a limited extent result in changes to the terminology used in the English translation of the Act.

INSIGHT · danish company law reform bill · february 2009 – Group (koncern) (adapted to the Danish Act on Commercial Enterprises’ Presentation of Financial Statements, etc. (årsregnskabsloven) – actual control is determining factor, no shareholding requirement) – Shareholders’ agreements (ejeraftaler) (shareholders’ agreements in public limited companies (aktio- næraftaler)/shareholders’ agreements in private limited companies (anpartshaveraftaler)) – Register of shareholders (ejerbogen) (register of shareholders for public limited companies (aktiebog)/register of shareholders for private limited companies (anpartshaverfortegnelse)) – Public register of shareholders (ejerregister) (public register replacing the register of major shareholders (storaktionærfortegnelsen). All shareholders holding a share of more than 5% in a company will appear from the public register of shareholders.) – Central management body (det centrale ledelsesorgan) (board of directors or management board, depending on the management structure) – Supreme management body (det øverste ledelsesorgan) (supervisory board, board of directors or management board, depending on the management structure) – Right of representation (repræsentationsret) (right to be represented at general meetings)

Management of the limited liability company

Management models Today, public limited companies are managed by a board of directors and a management board. Private limited companies, on the other hand, may be managed by a management board or by a board of directors or by both.

One of the amendments proposed in the Bill is increased freedom of choice between the various management models applied today in Denmark’s peer countries. Limited liability companies will be free to choose between the following management models:

– Board of directors and management board as we know it today (’current Danish management model’) – Supervisory board and management board (’German management model’) – Management board – to apply only to private limited companies, unless the individual private limited company is subject to rules on employee representation (’the Anglo-Saxon management model’)

Current Danish management model In the current Danish management model, the company is managed by the board of directors and the management board. The board of directors is in charge of the overall and strate-

Board of directors gic management, whereas the management board is in charge of the day-to-day management of the company. The management board must follow the directions and guidelines provided by the board of directors. Management board The day-to-day management undertaken by the management board does not, as is the case today, include transactions which, considering the scope and nature of the company’s activities, are of an unusual nature or magnitude. According to the new terminology, the board of directors consti- tutes the central as well as the supreme management body.

INSIGHT · danish company law reform bill · february 2009 A member of the management board of a public limited company may not hold the office of chairman (or vice-chairman) of the board of directors, and the majority of the members of the board of directors must be persons who are not members of the management board of the company.

Like today, the board of directors in public limited companies must consist of at least three persons. The requirement stipulating at least one member of the management board continues to apply irrespective of the choice of management model.

As something new, the Bill specifies the duties of the board of directors, but does not, as such, intend to alter the content of such duties. The board of directors must continue to ensure the proper organi- sation of the business of the limited liability company. A similar specification has been provided for private limited companies with a board of directors.

The board of directors undertakes to perform the following duties and to ensure observance of:

– Bookkeeping and financial reporting – Risk management and internal controls – Reporting on the limited liability company’s financial position – The management board’s performance of its duties – The propriety of the company’s financial resources – Sufficient liquidity in the limited liability company

It has also been proposed as something new that the chairman of a board of directors in listed and state-owned public limited companies may perform duties which have been imposed on him/her by the board of directors, should a special need arise.

The German management model In future, the management of a limited liability company may be undertaken by a supervisory board and a management board. The supervisory board will oversee the management of the Supervisory board company, whereas the management board will be in charge of managing the company. (Aufsichtsrat) The supervisory board assumes a controlling role only and will not be in charge of the overall or strategic management undertaken by the board of directors under the current Danish management model. Management board (Vorstand) The supervisory board will not be authorised to sign for the company or to issue directions or guidelines to the management board, but only to appoint and dismiss members of the management board. Other than that, the supervisory board will be entrusted with the same duties as pertaining to the board of directors under the current Danish management model.

INSIGHT · danish company law reform bill · february 2009 A member of the supervisory board may not be a member of the management board at the same time and vice versa. The supervisory board acts as the supreme management body, whereas the management board acts as the central management body. Any employee representatives will have a seat on the supervisory board.

The Bill repeals the current provisions on the committee of shareholders as the powers of the supervisory board should, among other things, correspond to the powers of the committee of shareholders. However, in its articles of association, a limited liability company may, irrespective of the choice of management model, decide to establish an additional company body in the form of a committee of shareholders.

Committees of shareholders in financial undertakings continue to be subject to the Danish Financial Business Act (lov om finansiel virksomhed).

The Anglo-Saxon management model Private limited companies may still choose to have one management body only consisting of a management board, which is in line with the Anglo-Saxon management model. Today’s freedom of choice between a board of directors and a management board will not be

Management board incorporated in the new Act.

The management board will constitute both the central and the supreme management body. Private limited companies which elect employee representatives must have a management board and either a board of directors or a supervisory board.

Employee representation To a very wide extent, the Bill continues to include the current provisions on employee representation. However, there is a difference in that, in future, it will be possible to derogate from a number of the current rules – for example the procedural rules – by agreement between the management and the employees.

Employees may, for example, elect a number of representatives on the board of directors or the supervisory board which is lower than prescribed by law. Or a parent company’s general meeting may pass a resolution to the effect that employees in foreign subsidiaries may participate in elections and be eligi- ble for group representation on the board of directors or the supervisory board.

Rules of procedure for the board of directors and the supervisory board Any limited liability company with a board of directors or a supervisory board must adopt a set of rules of procedure. The Bill sets out a number of issues which ought to be taken into consideration in that connection.

Managerial liability As under current law, the Bill prescribes that the liability of management is fault-based, and the Bill does not indicate an intention to promote increased managerial liability. In a number of areas, management will instead enjoy enhanced freedom of action.

Examples of enhanced freedom of action include the possibility of refraining from engaging an auditor in a number of situations as well as the possibility of using self-financing, shareholder loans and purcha- sing own shares within the amount of the company’s distributable reserves.

Hence, management may to a wider extent than before deal with for example the company’s distributable reserves, implying a corresponding enhancement of management’s field of responsibilities, yet management must be judged on the basis of the current fault standard.

INSIGHT · danish company law reform bill · february 2009 Language used by the board of directors and the supervisory board The Bill provides greater flexibility with respect to the language used by the board of directors and the supervisory board. The articles of association may, for example, specify that the corporate language is English, meaning that meetings of the board of directors or the supervisory board may be conducted in English without simultaneous interpretation.

If the articles of association do not specify a corporate language, the majority of the members of the board of directors or the supervisory board may decide to conduct the meeting in another language than Danish, provided that simultaneous interpretation services are available. In the event that no such services are available, and where a corporate language has not been chosen, the meeting must be conducted in Danish. English is the only alternative choice of corporate language available.

Documents to the Danish Commerce and Companies Agency The Bill authorises the Danish Commerce and Companies Agency to lay down rules stipulating that a company whose board of directors, advisory board or general meeting uses Nordic languages or English may submit documents to the Agency in the specific language used without a translation into Danish.

General meetings

Passing of resolutions without convening general meetings A number of the amendments suggested in relation to general meetings have arisen from the implementation of the Directive on the Exercise of Certain Rights of Shareholders in Listed Companies. The Bill provides enhanced flexibility with respect to the way in which resolutions may be adopted by the general meeting.

This means, among other things, that if there is consensus among them, the shareholders may decide to adopt resolutions without convening a general meeting. This, however, does not apply to listed or state- owned public limited companies. Hence, a statutory basis is expressly provided for general meetings per capsulam and documentary general meetings. Moreover, general meetings may be convened via the company’s website, if so provided in the company’s articles of association.

INSIGHT · danish company law reform bill · february 2009 As for registered shares, notices convening the general meeting must still be sent (for example by email) to shareholders having so requested. Holders of bearer shares must be convened via the Danish Commerce and Companies Agency’s website.

Notices, etc., convening general meetings As something new, general meetings must be convened at a minimum notice of two weeks and a maximum notice of four weeks (today, general meetings must be convened at a minimum notice of eight days and a maximum notice of four weeks). The same applies to the availability of documents, etc., for inspec- tion.

The Directive on the Exercise of Certain Rights of Shareholders in Listed Companies provides a minimum notice of three weeks and a maximum notice of five weeks for listed companies. The date of annual general meetings in listed public limited companies must be announced eight weeks prior to such meetings.

Proposals for specific business to be considered at the general meeting having been received more than six weeks (eight weeks in listed public limited companies) prior to the general meeting must be included in the agenda. Any proposals having been received less than six weeks prior to the general meeting may be included in the agenda if management deems that adequate time is available for such inclusion.

Holding, etc., of general meetings As a main rule, amendments to limited liability companies’ articles of association must be adopted by two-thirds of the votes cast and of the share capital represented at the general meeting. This entails an abolition of the existing option of private limited companies to set out in their articles of association that resolutions to amend the articles of association must be passed by a simple majority of votes and in proportion to the votes cast.

In future, a resolution to conduct general meetings via electronic means only may be entered in the articles of association at the formation of the company without a special majority. Resolutions on such entry at a later time may be passed simply by a majority vote for amendment, which is a relaxation of current requirements.

As for listed public limited companies, it is proposed that participation in and the right to exercise voting rights at general meetings be made subject to a deadline for registration in the register of shareholders. The deadline for registration will be one week prior to the general meeting.

Proxy, etc. As something new, the Bill allows shareholders to grant persons other than the management of the limited liability company indefinite proxy for their votes. Proxy to the management of the limited liability company must be granted for a specific general meeting with a known agenda and must be limited to twelve months.

It is specified that – like the shareholder – the holder of the proxy is entitled to be accompanied by an adviser. Moreover, in future, limited liability companies will be obliged to allow postal votes.

Choice of language at general meetings As is the case with the choice of language used by the board of directors and the supervisory board, the Bill will allow limited liability companies to conduct general meetings in other languages. General meetings in existing companies may, for example, resolve to conduct general meetings in Swedish, Norwegian or English by a simple majority of votes.

INSIGHT · danish company law reform bill · february 2009 Resolutions to choose any other languages may only be passed by a simple majority of votes if the participants are offered simultaneous interpretation. If the limited liability company does not offer the participants such simultaneous interpretation, resolutions to conduct the meeting in other languages must be adopted by a nine-tenth majority of votes. In such a situation, the minority may request redemption of their shares.

Likewise, at its formation, the limited liability company may set out in the articles of association that the language used at general meetings is another language than Danish.

Shareholders’ agreements In order to clarify the state of law, the Bill sets out that agreements concluded between shareholders (shareholders’ agreements) do not have a binding effect on resolutions adopted by the general meeting. Shareholders’ agreements as we know them today will, in some cases, have a binding effect on the resolutions passed at general meetings.

No amendments are intended with respect to the possibility of binding the limited liability company’s management. The Bill does not provide any rules on interim provisions.

Dispute resolution The Bill allows the courts to decide that an abusing shareholder may be forced to sell his/her shares in the event of a dispute between two shareholders. Current law only allows the courts to order one shareholder to redeem the shares of the other shareholders.

10 INSIGHT · danish company law reform bill · february 2009 Formation

It has not so far been possible to form limited liability companies prospectively, but that option will now be put into play. When assets other than cash are contributed (non-cash contribution), the date of formation may, however, not be later than the date on which the application for registration is filed with the Danish Commerce and Companies Agency.

Today, a company may be formed with retrospective effect for accounting purposes by contribution of an existing business. The Bill also opens up the possibility of contributing a controlling equity interest with effect for accounting purposes as from the first day of the accounting period.

The Bill introduces a general time limit of two weeks within which notification must be made to the Danish Commerce and Companies Agency, unless otherwise provided by law. This means that the time for notification of formation of a limited liability company is two weeks from the date of execution of the memorandum of association – as opposed to the current six months for public limited companies and eight weeks for private limited companies.

Capital contribution on formation One of the more significant and innovative proposals is the de facto removal of the minimum capital requirement for private limited companies and provisions to the effect that not all of the company capital needs to have been paid up on formation and in connection with capital increases.

Under existing law, the entire company capital of DKK 500,000 for public limited companies and DKK 125,000 for private limited companies must have been paid up in full on formation and in connection with subsequence subscription. The Bill removes the capital requirement for private limited companies, meaning that, in future, a private limited company may be formed with a share capital of for example DKK 1. The capital requirement (but not the requirement to pay up) for public limited companies will still be DKK 500,000.

In limited liability companies with a share capital of DKK 500,000 or more, the subscribers are only required to contribute a minimum of 25% inclusive of any premium, which is in line with the Second Company Law Directive. If the contribution is made in assets other than cash (non-cash contribution), the entire share capital must be paid up, as is the case today.

11 INSIGHT · danish company law reform bill · february 2009 It will also become possible to contribute a claim against promoters or shareholders if agreed by the limited liability company’s promoters and other subscribers of capital.

Payment of outstanding share capital The central management body of the limited liability company may call up the unpaid part of the outstanding, subscribed share capital (without offering any explanation). The management must regularly assess the propriety of the limited liability company’s capital resources and whether they are adequate to fund and proportionate to the limited liability company’s activities.

The deadline for payment is two weeks from receipt of the share call, unless a longer deadline is provided in the company’s articles of association, which deadline may not exceed four weeks. Unless otherwise provided in the company’s articles of association, all shareholders must, as a general rule, be given the same notice.

In the event of late payment by a shareholder, all of the voting rights attaching to the combined shareholding of such shareholder will be lost and the shareholder will not be considered represented at the general meeting. The limited liability company’s claim will be enforceable before the enforcement court without a separate basis of execution.

A shareholder may transfer his or her shares not fully paid up, but the transferring shareholder will still be bound by the obligation to pay up the shares. The transferor and all subsequent transferees will be jointly and severally liable for the obligation to pay up the shares. For this reason, it will for example not be convenient to operate with outstanding share capital in listed companies.

In the annual report, the limited liability company must state any outstanding payments and regularly report any payments to the Danish Commerce and Companies Agency for registration. If the company’s claims against shareholders are to be written down, it may be necessary to make a capital reduction.

As a result of these rules, the rules on capital losses provide that a capital loss must be calculated in proportion to the subscribed capital and not to the paid up capital.

Contribution of assets other than cash (non-cash contribution) The Bill opens up the possibility that the central management body can choose not to prepare a valuation report in the event of contribution of assets other than cash (non-cash contribution), by referring to objectively ascertainable assets. Instead, the central management body must prepare a management statement to be filed with the Danish Commerce and Companies Agency.

According to the Bill, an objectively ascertainable asset means:

– An asset traded on a regulated market. – An asset the fair value of which originates from the preceding statutory financial statements (the asset must be valued separately in the financial statements and the financial statements must be audited). – An asset which has been independently valued by an expert, which valuation must not be more than six months old.

Requirements to the limited liability company’s articles of association, etc. According to the Bill, the company’s registered office is no longer to appear from the articles of association but instead from the Central Business Register (CVR). This means that if the company decides to move its registered office, this decision will no longer be subject to a resolution of the general meeting.

12 INSIGHT · danish company law reform bill · february 2009 Share capital

No par value shares and non-voting shares Under existing law, the share capital of a Danish public or private limited company must have a nominal value. The Bill introduces the possibility of issuing shares without a nominal value (no par value shares). The share capital of the limited liability company may thus be divided into no par value shares, which must all have the same value – for example a share capital of DKK 1m divided into 100,000 no par value shares as opposed to a share capital of DKK 1m divided into shares of DKK 10 each).

The Bill reintroduces the possibility of issuing non-voting shares for new shares in public limited companies; an option which is today possible in private limited companies. Similarly, the existing maximum voting differentiation of 1:10 will be abolished. It is specified in the Bill that non-voting shares are not to be included as represented capital at the general meeting, unless otherwise provided in the company’s articles of association.

Register of shareholders and public register of shareholders The present Danish terms for register of shareholders for public limited companies (aktiebog)/for private limited companies (anpartshaverfortegnelse) will, according to the Bill, in future collectively be named ejerbøger. In English, the term will remain unchanged. The register of shareholders will, as today, evidence title to the shares, and access to the register of shareholders will be subject to the existing rules.

As something quite new, the Bill introduces a public register of shareholders in the Danish Commerce and Companies Agency in which shareholders holding at least 5% of the share capital or controlling at least 5% of the voting rights in a limited liability company must be registered.

The thresholds for registration in the public register of shareholders are the same as the ones applying to notifications to the register of major shareholders, with the adjustments necessitated by the existing flagging requirements under the Danish Securities Trading, etc. Act (værdipapirhandelsloven). The company must be notified no later than two weeks after the flagging thresholds are exceeded, after which the company must record the information in the public register of shareholders as soon as possible and within two weeks.

13 INSIGHT · danish company law reform bill · february 2009 Capital increase

As is the case in connection with formation, a capital increase may also be made by partial contribution and issuance of non-voting shares.

The Bill further provides that private limited companies are also to be allowed to issue warrants and convertible debt instruments according to the same rules as apply to public limited companies. By aut- horising the board of directors to issue warrants or convertible debt instruments, the existing restriction that the amount of the issue may not exceed 50% of the share capital of the company on the date of the decision will be abolished.

Capital reduction, etc.

Interim dividend payments The existing rules governing the payment of interim dividends will still apply, with the exception that the requirement to include the authorisation to the central management body in the articles of association of the company will be abolished. Also the requirement for a management statement on propriety and preparation of an interim balance sheet in private limited companies will be abolished. For public limited companies, it will be optional whether to have an auditor review the interim balance sheet. Furthermore, the interim balance sheet may, subject to the management’s decision, be replaced by the most recent financial statements or interim financial statements.

The existing requirement to prepare a valuation report in the event of dividend payments in assets other than cash may, according to the Bill, be replaced by a management statement if the assets in question are objectively ascertainable assets when applying the same criteria as apply in connection with the contribution of assets other than cash on formation of the company (non-cash contribution).

14 INSIGHT · danish company law reform bill · february 2009 Under existing law, companies may only distribute dividends two years after the company has entered into liquidation. This two-year limitation will be abolished and instead it will become possible to make interim dividend payments of the liquidation proceeds against the provision of security.

Capital reduction It will become possible to authorise the central management body to decide to make a capital reduction in private limited companies. At the same time, the requirement for the preparation of a valuation report in connection with a capital reduction to cover a loss will be abolished for all limited liability companies. In connection with a capital reduction by distribution of assets other than cash, the valuation report may be replaced by a management statement, which will be subject to the same criteria as apply to the contribution of assets other than cash in connection with the formation of the company (non-cash contribution).

A new provision will be introduced stipulating that capital reductions for distribution or allocation to a separate fund will automatically be effected, unless the central management body notifies to the Danish Commerce and Companies Agency that it will not have to be effected before expiry of the date after which claims are barred (in Danish: proklama). The management will still be responsible for assessing the propriety of the capital reduction. It will be expressly prohibited to go through with the capital reduction if the creditors have not been paid or provided with security.

Own shares The Bill implements the option provided in the Second Company Law Directive for public limited companies to purchase own shares in excess of the existing threshold of 10% of the share capital. Similarly, private limited companies will be allowed to purchase own shares. The purchase of shares may take place within the amount of the company’s distributable reserves – and only fully paid up shares may be purchased. The minimum share capital (less own shares) will be DKK 500,000. No such minimum amount has been fixed for private limited companies.

Self-financing The existing prohibition against self-financing will be abolished. Self-financing means that a limited liability company directly or indirectly provides financial assistance by making funds available, granting loans or providing security in connection with a third party’s purchase of shares in the company. The Bill will allow self-financing within the amount of the distributable reserves of the limited liability company.

The general meeting must approve the purchase by the majority required to amend the articles of association. The purchase must be on arm’s length principles, which principles are not defined in the Bill. The central management body must make a credit assessment of the group receiving the company’s financial assistance. The central management body must furthermore prepare a statement describing the background to the proposal as well as the consequences to the liquidity and solvency of the company. The management will be responsible for ensuring that, following the granted self-financing, the company still has the required capital resources.

Financial assistance to the parent company, shareholders, members of management, etc. Under existing law, public limited companies and private limited companies may for example not grant loans to or provide security for shareholders or the management of the company. The Bill now opens up the possibility of shareholders granting loans to members of management on the same terms as apply to the new possibility for companies to legally provide self-financing, cf. above. As is the case now, the restriction does not include loans made in the ordinary course of business.

Loans to Danish and certain foreign parent companies and provision of security for the obligations of Danish and certain parent companies may still be provided within the amounts of both distributable and

15 INSIGHT · danish company law reform bill · february 2009 undistributable reserves. The Bill allows certain foreign parent companies situated outside the EU or EEA countries which are parent companies of a Danish limited liability company to receive parent company loans. These countries include Australia, Canada, Japan, South Korea, New Zealand, Singapore, the USA and Hong Kong.

As is the case today, the restrictions in relation to self-financing and financial assistance do not include transactions involving the purchase of shares to the employees.

Restructurings

National mergers and divisions The rules on mergers and divisions will be eased with the Bill in a number of areas. For instance, shareholders may decide not to prepare certain documents, these being for instance the management’s written statement on the merger plan in private limited companies and on the draft terms of division for limited liability companies, the auditors’ statement on the draft terms of division and the consideration in limited liability companies and the interim balance sheet in the event of a merger of private limited companies and in the event of a division of limited liability companies.

Moreover, the Bill opens up the possibility that a merger or division may be effected immediately if a statement from the auditors is available stating that the creditors are sufficiently secured. The shareholders may agree not to have the auditors prepare such a statement, if the creditors are allowed to file their claims within a four-week deadline.

Cross-border mergers and divisions The existing rules on cross-border mergers and divisions will generally still apply with the addition of a number of gap-filling rules. Moreover, the requirements for the auditors’ involvement – such as for instance in connection with national mergers and divisions – are eased.

Cross-border transfer of registered office It will become possible for limited liability companies to transfer their registered offices to and from Denmark. The Bill contains a vast number of procedural rules which must be observed in that connec-

16 INSIGHT · danish company law reform bill · february 2009 tion. The rules correspond to a wide degree to the rules on cross-border mergers and divisions. Minority shareholders who at a general meeting have voted against a resolution to transfer the company’s registered office will now become entitled to demand redemption of their shares.

Conversion The Bill introduces gap-filling rules on the conversion of a co-operative society into a public limited company, but apart from that no other changes have been introduced.

Branches

The existing procedural rules involved in connection with the filing for registration with the Danish Commerce and Companies Agency of a branch will be eased in a number of areas. It will for example no longer be a requirement to submit documentation of the existence of the main company, memorandum of association or articles of association when the registered office of the main company is situated in an EU or EEA country.

Moreover, the Danish Commerce and Companies Agency will have the authority to lay down rules on the re-registration of a branch under the same number in the Central Business Register in the event of late submission of the main company’s annual report.

17 INSIGHT · danish company law reform bill · february 2009 Contact us

Bech-Bruun is a highly specialised Danish law firm with offices in Copenhagen and Aarhus. We provide value-adding legal solutions to the corporate sector, organisations and public authorities in Denmark and abroad.

Our 35+ M&A Corporate lawyer team is specialised within all areas of company law, including company formation, capital structure, control issues, planning and conducting of general meetings, board and management duties, dividend payments, shareholder loans, own shares, stock options, mergers, conver- sions, division and winding-up. We aim to assist our clients in optimising their business performance. You can read more about M&A Corporate at www.bechbruun.com.

We will regularly report on the status of the Bill and we will hold an information meeting and a panel debate as soon as the Bill is introduced before the Danish Parliament, which we expect will be around February 2009. Please feel free to contact us with any questions you may have.

COPENHAGEN AARHUS

Monica Reib Søren Tonnesen Partner Partner T +45 72 27 35 82 T +45 72 27 33 03 E [email protected] E [email protected]

Niels Kornerup Jens Jerslev Partner Partner T +45 72 27 35 75 T +45 72 27 34 67 E [email protected] [email protected]

Jens Chr. Hesse Rasmussen Partner T +45 72 27 35 60 E [email protected]

Sanne Dahl Laursen Professional Support Lawyer T +45 72 27 35 02 E [email protected]

18 INSIGHT · danish company law reform bill · february 2009 Contact Bech-Bruun

T +45 72 27 00 00 E [email protected]