''Aktieselskab'' (;

abbr. An abbreviation (from Latin ''brevis'', meaning ''short'') is a shortened form of a word or phrase, by any method. It may consist of a group of letters or words taken from the full version of the word or phrase; for example, the word ''abbrevia ...

: A/S, or a/s,

Unicode Unicode, formally The Unicode Standard,The formal version reference is is an information technology Technical standard, standard for the consistent character encoding, encoding, representation, and handling of Character (computing), text expre ...

; literally meaning: "stock company") is the

Danish Danish may refer to: * Something of, from, or related to the country of Denmark People * A national or citizen of Denmark, also called a "Dane," see Demographics of Denmark * Culture of Denmark * Danish people or Danes, people with a Danish a ...

name for a

stock In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...

-based

corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and r ...

. An ''aktieselskab'' may be either publicly traded or private.

Liability

The

shareholders A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal owner ...

of an ''aktieselskab'' are not liable for the debts of the company. This can be used to protect the assets of the company against creditors by forming a group of companies. If an A/S is owned by a

holding company A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...

(typically another A/S), the profit from the production company can be transferred to the holding company. Since there is no liability for the owners of an A/S, creditors from the production company will not be able to claim the profit in case of

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...

. Professional creditors, such as banks, protect themselves from this by demanding that the holding company guarantees the debts of the production company.

Formation of an ''aktieselskab''

The formation of an ''aktieselskab'' requires a number of steps, including the following: *Notification concerning the formation to the Danish Business Authorities. *Registration of the company. *Resolution to form the company at the first general meeting. *Subscription for shares and payment of the share capital. The share capital must be greater than 400,000 DKK. *The signing of a memorandum of association which must contain a draft of the articles of association of the company. An ''aktieselskab'' can only acquire rights or incur obligations as a company when it has been registered at the Danish Commerce and Companies Agency.

Share capital

The share capital registered at the Danish Commerce and Companies Agency must be at least 500,000 DKK. The capital can come from contributions of cash or other assets. If half of the capital is lost the board of directors must convene a general meeting within six months.

Board of directors

An ''aktieselskab'' must have a

board of directors A board of directors (commonly referred simply as the board) is an executive committee that jointly supervises the activities of an organization, which can be either a for-profit or a nonprofit organization such as a business, nonprofit organiz ...

consisting of at least three members. Members of the board can be elected for a period of up to four years depending on the articles of association. The board members are usually elected at the general meeting. The articles of association may confer upon public authorities or any third party the right to appoint one or more members of the board of directors. In companies with an average workforce of over 35 employees during the last three years, the employees are entitled to elect among themselves a number of members of the board of directors equal to half the members of the board of directors elected by the shareholders or appointed by third parties.

References

{{Reflist

External links