In Denmark the founder of a limited liability company or a limited partnership has the option to pay in only part of the capital when establishing the company. The company can then collect the remaining capital if and when it becomes necessary.
It has previously been debated – but never settled – whether or not the pending capital could be lost through time limitation. As of 1 January 2014 new legislation has settled the matter – so far.
A new provision regarding time limitation on pending capital has been implemented in the Danish statute of limitations. The provision contains a time limitation on the pending capital in two parts.
Firstly, it is determined that the collected pending capital is subject to time limitation upon collection. The time limitation is calculated in accordance with the general rule, by default three years and consequently, the claim is lost due to time limitation if the collected pending capital has not been recovered within three years.
Naturally, the time limitation may be suspended in accordance with the general rules in the statute of limitations.
Secondly, it is determined that the time limitation for the non-collected, but pending capital shall commence no later than ten years after the capital could have been collected. Thus, the pending capital is subject to time limitation regardless of whether it has been collected or not.
The definition of “could have been collected” has not been settled in the statute of limitations and will depend on the articles of association of the company and the founder’s subscription agreement.
The new legislation is fully implemented as of 1 January 2014 and applies to all companies with pending capital. This means that some companies may already have lost their pending capital due to time limitation by the date of commencement of the new legislation.
All companies with pending capital – and creditors in companies with pending capital – should therefore have the specific circumstances of the company examined to ensure the pending capital.
You are most welcome to contact us for any further queries and you may contact our partner, attorney at law Mr Niels Christian Døcker or attorney at law Mathias Toxværd.