Dipartimento di Scienze giuridiche CERADI – Centro di ricerca per il diritto d’impresa Principles of danish company law 1 Maria Gabriella Cucca Febbraio 2013 © Luiss Guido Carli. La riproduzione è autorizzata con indicazione della fonte o come altrimenti specificato. Qualora sia richiesta un’autorizzazione preliminare per la riproduzione o l’impiego di informazioni testuali e multimediali, tale autorizzazione annulla e sostituisce quella generale di cui sopra, indicando esplicitamente ogni altra restrizione 1 Il presente elaborato costituisce un abstract della Tesi di Laurea discussa alla fine del corso di studi in Giurisprudenza, presso la Luiss Guido Carli, in data del 9 ottobre 2012. In aggiunta, le modifiche inerenti le novità legislative recentemente intercorse. Index: - 1. Sources. - 2. The Companies Act. - 3. Public and private companies. - 3.1 Incorporation. - 3.2 Articles of association. - 3.3 Memorandum of association. - 3.4 Share capital. - 3.5 Shares. - 3.6 General meeting. - 3.7 Distribution of dividends. - 4. Governance structure. - 4.1 Traditional model. 4.2 Alternative governance models. - 4.3 Employees representation. - 5. Foundation ownership. 1. Sources Danish company law is a complex system composed by rules of legislative nature and, above all in the last decade, soft law derivation. The most important sources of legislative order are the Companies Act (Selskabsloven), where is defined the company structure and are stated the fundamental principles of corporate law, the Securities Trading Act (Værdipapirhandelsloven ) that contains the most of the capital markets regulation and the Financial Statement Act ( Årsregnskabsloven) regarding the accounting regulation . In addition, it has to be mentioned the Act on Business Enterprises, regulating the different types of partnership, and the Act on Commercial Foundations (Fondsloven) concerning the particular phenomenon of industrial foundations. The Code on Corporate governance constitutes, instead, an instrument of self-regulation, issued to provide for important recommendations about the most significant aspects of company’s operation, and the allocation of powers among the different corporate bodies, with reference especially to public companies. 2.The Companies Act The Companies Act identifies the essential characteristics of the Danish companies and the governance mechanisms. The actual structure of this body of legislation is more understandable in the light of a long process started during the beginning of the XX century. The Act of Danish Register of Companies, issued in the 1930, is the first legislative act concerning the company regulation. While it remained in force, that is until the first half of the ’70, the Danish company law has been strongly stable and capable to represent the basis for the future development of the corporate system. The assumption behind this regulation was a deep influence of the Government in the business function. However, thanks to later emendations, company law has become more flexible and liberal, strongly aimed at boosting the basis for a complete establishment of the doctrine of freedom to contract and of the development of strong shareholder’s powers. As a result of this process, the diffusion of three forms of ownership structure took place. In fact, still today family business, foundation-owned companies and, to a minor extend, public companies are the most common forms of business among Danish companies. In 1972, as the outcome of the cooperation activity among Nordic countries for the creation of a homogeneous corporate legislation, a new Danish Corporate Act was issued. In particular, it provided stronger protections for external stakeholders, the employee representation on the board of directors and it gave a new definition of corporate group, above all with regard to accounting obligations. In the 1981 and later in the 1990, as a consequence of the implementation of the 1 st and 7 th directive, many significant emendations were introduced in the field of disclosure obligations and evaluation criteria of the consolidated financial statement. In addition, at the beginning of the ’90, in the wake of the EU harmonization process, the lawmaker introduced the principle of the separation of CEO and Chairman roles and the possibility to start a one-person company . Despite the gradual implementation of external stakeholders protections and the convergence towards the EU standards, the ownership structures, fostered by the law of 1930, continue to dominate in the companies sector , together with the cooperatives in the agricultural one. At the beginning of the 2000s, two bodies of legislation, the Public Companies Act and the Private Companies Act, were issued to sum up the entire corporate law regulation. Finally, in 2010, the New Companies Act entered into force to specify and complete the aim undertaken by the Public and the Private Companies Acts. In particular, it contains a collection of all the rules previously issued, structured in such a way to be the most coherent and flexible as possible. New legal notions, therefore, had to be enucleate in place of several concepts known and embedded in the previous legislation. The drafting technique, the lawmaker has employed, consists in the partition on the text in two areas: the first containing regulations applicable to the entirety of limited companies, the second addressed exclusively to the public limited ones. 3.Public and Private Companies The Companies Act starts describing the essential of limited liability companies and distinguishes between public ( aktieselskab or A/S) and private limited companies (anpartsselskab or ApS) . As we already saw, there is a range of regulations provided for both those categories regarding the incorporation process, the company operation and the general governance mechanisms, so that the majority of the significant features are generally the same. In fact, the difference between public and private companies is that only the formers are eligible for listing. As a consequence, the Companies Act provides for a less flexible regulation of public companies, requiring more restrictions and formal requirements. 3.1 Incorporation The company’s incorporation is regulated by the Companies Act that, in turn, has implemented the EU directives concerning this topic. In particular, the process of incorporation starts from the initiative of a number of promoters or founders that have to register the new legal entity at the Danish Commerce and Companies Agencies (DCCA). The registration procedure can take from a couple of day up to four weeks but, the registration time can be reduced thanks to a service (called “ webreg ”), recently introduced by the DCCA, which allows persons or entities already registered to undertake online the incorporation. Until the conclusion of the registration process, whoever acts on behalf of the new entity is considered personally liable for the contracted obligations. 3.2 Articles of association Once approved and subscribed by all the members, the articles of association have to be filed with the DCCA in order to proceed with the registration. The Companies act provides a minimum of information 2 that have to be compulsorily indicated, however, the shareholders can include further provisions (as long as they are compatible with these provided by law) in order to organize the company in such a way they believe is more adequate. On the other hand, since the articles of associations are available to the public from the moment they are filed at the DCCA, the members commonly include only the information required by law: more detailed provisions will be embedded in the shareholders agreements, not subjected to any kind of disclosure. In fact, it is necessary to specify shareholders agreements have no binding effect on the company but only among the shareholders, contracting parties. 21. the company’s name and any secondary name(s); 2. the company’s object(s); 3. the amount of the share capital and the number or nominal value of the shares; 4. the rights attaching to the shares; 5. the company’s governing bodies; 6. notice of general meetings; and 7. the company’s financial year. 3.3 Memorandum of association The memorandum of association is a document, including the articles of association where information 3 about the company’s capital structure and some aspects of the corporate operation are specified. In addition, the shareholders can decide to insert others information such as special rights or benefits to be granted to promoters or others, any agreement entered into with promoters or others that may impose a major financial obligation on the limited liability company, whether shares may be subscribed against contribution of assets other than cash. 3.4 Share capital The Companies Act provides for a minimum share capital for the limited liability companies to be indicated in Danish kroner or euro. For the public companies, it is required a minimum share capital corresponding to DKK 500,000, whereas the private companies must have a share capital at least of DKK 80.000. The 25% of the share capital, not less than DKK 80.000, is to be paid up all times. As shares could be issued at a premium (considered as a distributable reserve), which is to be entirely paid up, even if the corresponding part or share capital is not paid up. It is possible to proceed to the payment of shares by contribution in cash or in kind. In case of in kind contribution, they must be valuable in economic terms, so that, the undertaking to perform a work or render a service are not 3 1. the names, addresses and Central Business Register (CVR) numbers, if applicable, of the promoters of the limited liability company; 2. the subscription price of the shares; 3. the time limits for subscribing and paying for the shares; 4. from which date formation takes legal effect; 5. from which date formation takes effect for accounting purposes ; 6. whether the limited liability company must pay the initial expenses and, if so, the estimated amount of such expenses. acceptable as contribution.