Annex 1.

DENMARK

Annex 1. D - Denmark

DENMARK
1. 2. 3. 3.1. 3.2. 3.2.1. 3.2.2. 3.2.3. 3.3. 3.4. 3.5. 4. 4.1. 4.2. 4.3. 4.4. 4.5. 5. 5.1. 5.2. 5.3. 5.4. 5.5. Local name of legal entities Size criteria Public Limited Company ( Aktieselskab, A/S) General overview Accounting records Preservation of accounting records Change management and discontinuation of activities Public authorities' access to accounting records Accounting principles (Danish GAAP) Annual report and financial statements Auditing/disclosure/publication Private Limited Company (Anpartsselskab, ApS) General overview Accounting records Accounting principles (Danis h GAAP) Annual report and financial statements Auditing/disclosure/publication General Partnerships ( Interessentskaber , I/S) General overview Accounting records Accounting principles (Danish GAAP) Annual report and financial statements Auditing/disclosure/publication 4 4 4 4 5 6 6 7 7 9 9 10 10 10 10 10 10 10 10 11 11 11 11

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6. 6.1. 6.2. 6.3. 6.4. 6.5. 7. 7.1. 7.2. 7.3. 7.4. 7.5. 8. 8.1. 8.2. 8.3. 8.4. 8.5. 9. 9.1. 9.2. 9.3. 9.4. 9.5. 9.6.

Limited partnerships ( Kommanditselskaber , K/S) General overview Accounting records Accounting principles (Danish GAAP) Annual report and financial statements Auditing/disclosure/publication Limited Partnership Company ( Partnerselskaber, P/S) General overview Accounting records Accounting principles (Danish GAAP) Annual report and financial statements Auditing/disclosure/publication Co-operative Limited Companies ( Andelsselskaber med begrnset ansvar , AmbA) General overview Accounting records Accounting principles (Danish GAAP) Annual report and financial statements Auditing/disclosure/publication Sole proprietorship ( Enkeltmandsvirksomhed ) General overview Accounting records Accounting principles (Danish GAAP) Annual report and financial statements Auditing/disclosure/publication Reference

11 11 12 12 12 12 12 12 12 12 12 12 12 12 12 13 13 13 14 14 14 14 14 14 14

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9.7.

Further supplementary comments

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Denmark 1. Local name of legal entities Small and medium -sized enterprises (SMEs) can generally operate through one of the following legal forms:

Public Limited Company (Aktieselskab , A/S) - Type A; Private Limited Company (Anpartsselskab , ApS) - Type A; General Partnerships (Interessentskaber , I/S) - Type B; Limited Partnerships (Kommanditselskaber , K/S) - Type B; Limited Partnership Company (Partnerselskaber , P/S) - Type A; Co-operative Limited Companies (Andelsselskaber med begrnset ansvar , AmbA) - Type B; Sole proprietorship (Enkeltmandsvirksomhed ) - Type C.
2. Size criteria The Danish Financial Stat ements Act lay s down both specific and general requirements for accounting principles in selected areas. The requirements in the law are divided in four accounting groups or classes in the Financial Statements Act. Class A D where A is the small -sized personally owned business and D is for the big listed public companies. The restrictions and obligations increase in each group. The sizes for small and medium -sized entities are as follows: Net turnover Euros Class A, regardless of size (personal owned partnerships, sole proprietorships) Class A, small-sized co-operatives Class B, small limited companies Class C (medium -sized limited companies) Class C (large companies) Class D (listed companies and state -owned companies regardless of size) 1.800.000 9.600.000 38.400.000 > 38.400.000 900.000 4.800.000 19.200.000 > 19.200.000 10 50 250 > 250 Total of Assets Euros Average number employees of

3.

Public Limited Company (Aktieselskab , A/S)

3.1. General overview The Public Limited Company ("Aktieselskab", A/S) has legal personality and the liability of the shareholders is limited to the contributions made. The public limited company can be used for small and medium -sized businesses, but they are normally more common for larger companies and listed compa nies.

Annex 1. D - Denmark

A public limited company may be founded by one or more founders (individuals or legal entities must sign a formation agreement including the articles of association for the company, and a constituting general meeting must be held. It is not necessary that any of the founders subscribe capital. The company must apply for registration with the Danish Commerce and Companies Agency within six months after the formation agreement has been signed. A company can begin to conduct business as soon as the for mation agreement has been signed. The company cannot, however, acquire rights against third parties or take on obligations before registration. Until the company is registered, the founders and the Board of Directors are personally liable if they are aware of the obligation or if they should be aware of the obligation. Other persons acting on behalf of the company are personally liable. Until registration has been completed, the company must use the words in the course of formation ( under stiftelse) after its name. There is no registration fee. The articles of association must include the name and objectives of the company, the municipality in which the company is resident, the amount of share capital, the number of board members and the accounting year, which need not follow the calendar year. Any changes in the articles of association must be approved at a general meeting of shareholders. At least two thirds of the votes cast as well as two thirds of the share capital represented must vote for the chang es. If the changes imply a reduction of the rights for some or all shareholders, e.g. a reduction of voting or dividend rights or a limitation of the negotiability of the shares, at least nine tenths of the votes cast as well as nine tenths of the share ca pital represented must vote for the changes. The articles of association may provide for stricter requirements as to quorum as well as to majority. The minimum share capital is DKK 500 .000 or the equivalent amount in Euros . The subscribed share capital and any share premium must be paid up in full (in cash or by payments in kind such as property, know -how, goodwill, etc.) before registration can take place. If shares are issued for a non -cash consideration, certain additional procedures must be followed to ensure that the assets contributed are properly valued. Shares may be issued as name shares or as bearer shares. Share certificates may be issued, but are not required if the shareholders agree. A company is not allowed to hold more than normally 10% of th e share capital as treasury shares. Furthermore, the Board of Directors purchase of own shares must be approved in advance at a general meeting. Approval cannot be given for a period of more than 18 months and must be specific with regards to percentage a nd price. Acquisition of own shares must only be made to the extent that the company's share capital exceeds the amount which cannot be allocated as dividend. Following an acquisition of shares, the share capital less treasury share must amount to no less than DKK 500 .000. Special rules apply if the purchase of treasury shares is necessary to avoid substantial and imminent damage to the company. Any shareholder holding shares representing more than 5% of the voting power or 5% of the total share capital amo unting to at least DKK 100 .000 is required to inform the company of his holding and of his full identity. Any shareholder is likewise required to inform the company of changes in his shareholding to the effect that limits of 5% intervals or of 1/3 or 2/3 o f the voting rights or total share capital is reached or no longer applies. Such information must be provided within four weeks of the change in shareholding. The company is required to keep a list o f shareholders exceeding the 5% -, 1/3- and 2/3 - limits. This list is open to the public and its information must be included in the financial statements as a note. All shares must have a voting right. The articles of association may provide that different classes of shares have different voting rights. No class of shares can have voting rights exceeding ten times the voting rights of other shares. 3.2. Accounting records Pursuant to the Danish Bookkeeping Act, all enterprises carrying on business for profit, shall keep accounting records. Additional requirements may apply pursuant to other legislation caused by specific industry considerations or special requirements, e.g. computation of taxable income. The purpose of the accounting records is identified via the transaction trail. In general, all accounting entries sh all be traceable to the financial statements or other statements forming the basis of the accounting entries. If an enterprise does

Annex 1. D - Denmark

not prepare financial statements or other statements required by the tax authorities or public authorities granting subsidies, transactions need not be booked. The bookkeeping procedures shall be planned and carried out in accordance with good bookkeeping practice having regard to the size and nature of the enterprise. Furthermore, the bookkeeping procedures shall secure the re cords against destruction, removal or distortion and against errors and misuse. Accounting entries shall b e made in Danish Kroner (DKK), E uro or another relevant foreign currency (as a functional currency according to IAS 21). Accounting entries may only b e made in foreign currencies if a.o. the accounting records contain information, including exchange rates, which makes it possible to translate into Danish kroner at any time. A complete definition of accounting records is provided in Section 3 of the Act. Agreements entered into by an enterprise with customers and suppliers in connection with electronic exchange of data also form part of the required accounting records. Further, accounting records comprise long -form audit reports, as long form audit report s contain information on uncertainties, errors or omissions in respect of an enterprise's bookkeeping, accounting systems or internal controls. If the accounting records, except for external vouchers, are drafted in languages other than Danish, the autho rities may require the enterprise obliged to keep accounting records to translate these into Danish free of charge. 3.2.1. Preservation of accounting records The requirements for preservation of accounting records apply irrespective of technology and preservati on form. However, part of the system description must always be preserved in hard copy. In addition to preservation in Denmark, accounting records may be preserved in Finland, Iceland, Norway or Sweden provided that the accounting records are preserved in accordance with the Danish Bookkeeping Act, that it is possible at any time to retrieve the records and that any description of systems etc. and passwords etc. are preserved in Denmark, which will enable access by public authorities to the accounting reco rds at any time. This exemption is laid down in a Statutory Order, a translation of which is provided in this publication. For countries other than the above, accounting records m ay be preserved abroad for a one -two-month period. If an enterprise carrie s out activities abroad, accounting records in respect of these activities may be preserved abroad for a 3 4-month period. Internal and external vouchers for the foreign activities may, however, be preserved abroad for the entire preservation period of fiv e years plus the current year. Under special circumstances, the Danish Commerce and Companies Agency may grant permission to preserve accounting records in other countries than the above five countries. However, permission is seldom granted. The Act allows for preservation of vouchers in electronic form only. 3.2.2. Change management and discontinuation of activit ies In case of a change in management, the resigning management is responsible for the preservation of the accounting records until the new management is appointed. If an enterprise discontinues its activities and/or if the duty to keep accounting records terminates, the most recent management shall ensure that the accounting records remain correctly pre served for the entire preservation period. System description A description shall be available of the bookkeeping procedures and accounting systems, which will enable a third party with reasonable knowledge of accounting and the technology used to identify entries and accounting records. The description shall include an outline of how the systems ensure completeness and accuracy of accounting records, how automatically generated entries are made, the methods used for the preservation of accounting records, and how accounting records are retrieved. The requirements for such a description are tailored to the nature and scope of the enterprise's activities.

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3.2.3. Access by public authorities to accounting records If, pursuant to other Danish legislation or court order, a public authority is entitled to request acc ounting records from an enterprise obliged to keep accounting records, the enterprise must produce such records free of charge. The public authority may also require that accounting entries denominated in foreign currencies be transla ted into Danish kroner and that the system description be translated into Danish. 3.3. Accounting principles (Danish GAAP) Public Liability Companies are required to apply the domestic GAAP, but are also allowed to apply IFRS. The choice of IFRS is seldom used by SMEs. Financial statements under Danish GAAP are investor oriented, with great emphasis on the use of the prudence principle in representing the true and fair view of a companys financial position, result and cash flows. The accounting approach is based on a mixture o f fair values and historic cost approach like under IFRSs. A Public Liability Company is required to apply the adopted accounting principles presenting a true and fair view of their financial position and financial result. The Danish Financial Statements Act is originally based on the recognition and measurement requirements in IAS in the 2001 version. On disclosures the Financial Statements Act is in line with the minimum requirements in 4 th and 7th EU directives. The Danish Financial Statements Act lay s down both specific and general requirements for accounting principles in selected areas. The requirements in the law are divided in four accounting groups or classes in the Financial Statements Act. Class A D where A is the small -sized personally owned b usiness and D is for the big listed public companies. The restrictions and obligations increase in each group. The sizes for small and medium sized companies are as follows: Net turnover Euros Class A, regardless of size (personal owned partnerships, sole proprietorships) Class A, small-sized co-operatives Class B, small limited companies Class C (medium -sized limited companies) Class C (large companies) Class D (listed companies and state -owned companies regardless of size) 1.800.000 9.600.000 38.400.000 > 38.400.000 900.000 4.800.000 19.200.000 > 19.200.000 10 50 250 > 250 Total of Assets Euros Average number employees of

Item Recognition and measurement R&D costs

Class A

Class B

Class C (medium)

Class C (large)

Expensed

Expensed

Expensed

Capitalised as in IAS 38 Percentage of completion method as in IAS 11 Recognition

Construction contracts

Recognition by delivery

Recognition by delivery

Percentage of completion method as in IAS 11 Recognition

Finance leases

No requirement

No requirement for

Annex 1. D - Denmark

for recognition and measureme nt

recognition and measurement unless leasing is material Recognised at fair value or amortised cost as in IAS 39

according to IAS 17

according to IAS 17

Financial assets other than derivatives

No specific requirement for recognition and measurement No specific requirement for recognition and measurement Nominal value

Recognised at fair value or amortised cost as in IAS 39

Recognised at fair value or amortised cost as in IAS 39

Derivatives

Recognised at fair value as in IAS 39

Recognised at fair value as in IAS 39

Recognised at fair value as in IAS 39

Financial liabilities other than derivatives Inventories

Amortised cost as in IAS 39 Only direct costs

Amortised cost as in IAS 39 Both direct cost and indirect cost as in IAS 2

Amortised cost as in IAS 39 Both direct cost and indirect cost as in IAS 2

Only direct costs

Presentation Cash flow statements Consolidated FS Management commentary No No No No No No Yes Yes Yes, with few requirements Many more Yes Yes Yes, with several requirements Several more

Disclosures

Few

More

The principles must be applied on a consistent basis assuming that the classification of business transactions, measurement of assets, liabilities a nd equity, including the amortis ation or depreciation charges, determination of the financial result, and preparation of the financial statements are carried out in the same way in consecutive years so that the information resulting from there for the consecutive financial years is compar able. Intangible and tangible assets must be stated in the balance sheet at their cost less accumulated amortis ation or depreciation. Assets are generally amortis ed or depreciated over their estimated useful live s. Goodwill must also be amortised on a yea rly basis (IAS 22 and IAS 38 - 2001 versions). An impairment has to be recognized if the higher of value in use or fair value less costs to sell is lower than the carrying amount (IAS 36 - 2001 version). Lease accounting is in accordance with the recognit ion and measurement requirements in IAS 17 - 2001 version. In generally all financial instruments are measured at either fair value or amortis ed cost (IAS 39 - 2001 version). Shares in subsidiaries and associates are measured at cost or equity method. Val uation of creditors and debtors are at amorti sed cost.

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Inventories are carried out at cost or net reali sable value if lower (IAS 2). Provisions should be made in consistency with IAS 37 for certain or probable future liabilities (being in principle an obligation resulting from past events), when the am ount can be reliably estimated.

Consistency between accounting periods and full disclosure of changes in accounting policy (Changes in the accounting solutions applied so far require a disclosure, in the not es to the financial statements, of the impact of those changes on the financial statements); 3.4. Annual report and financial statements The Danish Financial Statement Act establishes the format of the financial statements. As a minimum the financial statement s must consist of an income statement, balance sheet, notes and, if appropriate, consolidated financial statements. In addition, a Directors Report must be prepared. The financial statements must be in the Danish language. The accounting period is twelve months. On formation of the company and when the accounting year is changed in connection with the establishment of a group, the period may be shorter or longer but can never exceed eighteen months. If the accounting year is changed for other reasons, the transition period cannot exceed 12 months. The form and content of the financial statements are governed by the provisions of the Danish Financial Statements Act, which is based on the 4th and the 7th EU directives. The law requires that disclosures in th e financial statements be sufficient to enable a reasonable opinion to be formed about a companys financial position and results and, within limits, its liquidity and solvency. The companys equity, assets and liabilities must be reflected in the balance sheet, and the results for the year in the income statement (together with its notes) in a fair, clear and consistent manner. The Danish Financial Statements Act contains requirements about the content, analysis and classification of items in the financial statement. 3.5. Auditing/disclosure/publication In general Danish Public Limited Companies must prepare audited financial statements. However small Public Limited Companies are allowed to present and file an unaudited financial statement if for two consecutive accounting period s they fall to meet two of the following conditions: Total of assets : 200.000 Net turnover: 400.000 Average number of employees in the accounting period: 12.

If limited companies own shares in subsidiaries or associated companies (ho lding companies), they must present audited financial statements. All Public Limited Companies are required to file their Annual Report including financial statements and Directors Report (if required) to the Danish Commerce and Companies Agency as soon as possible after the Shareholders Meeting which approved the financial statement and no later than 5 month after balance sheet date. The annual report must include a Directors Report (DR) including comprehensive description of the development in the companys financial activities and position. If the financial statements have been significantly affected by unusual circumstances or there have been significant uncertainties relating to the preparation of the accounts, information to that effect should be gi ven in the DR. The information must be given separately and, if possible, the amounts involved must be stated. The DR must also give information on:

Important events occurr ing subsequent to the accounting year -end The companys expected future development Research and development activities

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The companys branches in foreign countries if applicable

Small Public Liability Companies in class B are exempted from preparing a DR if no significant changes in the economic environment or activities have occurred . 4. Private Limited Company ( Anpartsselskab , ApS)

4.1. General overview A private limited company ( Anpartsselskab , ApS) is similar to a public limited company ( Aktieselskab , A/S) from a legal point of view. The main purpose of a private limited company is to fac ilitate the establishment of small companies with limited liability, for instance for closely held family businesses. The private limited company form may also be used by larger undertakings, but in that case the requirements as to disclosure in the annual accounts, filing of information and management will be similar to those applicable for public limited companies. The main provisions of the Private Limited Companies Act differing from the Public Limited Companies Act are the following:

The starting capital of a private limited c ompany must be at least DKK 125.000 (about 16.700). The share capital must be subscribed by one or more of the founders.

Shares may not be issued as bearer shares, only as name shares. All shareholders must identify themselves to the company within four weeks of becoming shareholders or of no longer being shareholders. The company must keep a list of all shareholders. In a company with a share capital of DKK 500 .000 or more (about 67.000 or more), the list of shareholders is available to the public.

Information that all shares are owned by one sole shareholder is available to the public as well as the identity of the shareholder. A private limited company may not own treasury shares.

A private limited company need not have both a supervisory board and a board of directors. Its management can consist of only a supervisory board of one or more directors or of one or more board s of directors. If the company has only one management body, be it a board of directors or a general manager , this sole management body has all the management tasks and rights. 4.2. Accounting records Same as paragraph 3.2. 4.3. Accounting principles (Danish GAAP) Same as paragraph 3.3. 4.4. Annual report and financial statements Same as paragraph 3 .4. 4.5. Auditing/disclosure/publ ication Same as paragraph 3.5. 5. General Partnerships ( Interessentskaber , I/S)

5.1. General overview A partnership can either be organized as a general partnership ( Interessentskab , I/S) or a limited partnership (Kommanditselskab , K/S). A general partnership is an association of two or more persons having personal, joint and unlimited liability. Income tax is payable by each partner as an individual and not by the partnership as a whole. A partner may either be an individual or a limited liability company. T here is no specific partnership law in Denmark. Accordingly, it is advisable to draw up a

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Annex 1. D - Denmark

partnership agreement. A few rules for registration of partnerships etc. are mentioned in the Act on Certain Commercial Undertakings (Lov om visse erhvervsdrivende vi rksomheder ) A limited partnership is an association of one or more general partners with unlimited liability and one or more limited partners whose liability is limited to the amount of capital contributed to the partnership. The general partners and the limited partners can both be limited liability companies. 5.2. Accounting records Same as paragraph 3.2. 5.3. Accounting principles (Danish GAAP) A general partnership can choose to follow the Danish Financial Statements Act, class A or of financial statements based on tax rules.

it can choose to prepare a set

If a general partnership is owned by limited companies only, it will have to follow same accounting requirements as a limited company. As a minimum it will have to follow the class B rules depending o n the size of the partnership. See further description in paragraph 3.3. 5.4. Annual report and financial statements Same as paragraph 3.4. 5.5. Auditing/disclosure/publication General partnerships do not have to prepare audited financial statements. General partnerships own ed by limited companies only have to follow the same requirements as limited companies. In particular, they must prepare audited financial statements. However they are allowed to present and file an unaudited financial statement if for two consecutive acco unting periods the company falls to meet two of the following conditions: Total of assets: 200.000; Net turnover: 400.000; Average number of employees in the accounting period: 12.

General partnerships are not required to file their Annual Report to the Danish Commerce and Companies Agency. General partnerships owned by lim ited companies only have to follow the same requirements for publication as limited companies. Indeed, all Public Limited Companies are required to file their Annual Report including financial statements and Directors Report (if required) with the Danish Commerce and Companies Agency as soon as possible after the Shareholders Meeting which approved the financi al statement and no later than five months after balance sheet date. No requirements for a Directors Report (DR) in class A of the Danish Financial Statements Act (see also both tables in paragraph 3.3.). 6. Limited partnerships ( Kommanditselskaber , K/S)

6.1. General overview A partnership can either be organized as a General Partnership ( Interessentskab , I/S) or a Limited Partnership (Kommanditselskab , K/S). A Limited Partnership is an association of one or more general partners with unlimited liability and one or more limited partners whose liability is limited to the amount of capital contributed to the partnership. The general partners and the limited partners can both be limited liability companies.

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Annex 1. D - Denmark

There is no specific partnership law in Denmark. Accordingly, it is advisable to draw up a partnership agreement. A few requirements for registration of Limited Partnerships etc. are mentioned in the Act on Certain Commercial Undertakings (Lov om visse erhvervsdrivende virksomheder ). 6.2. Accounting records Same as paragraph 3.2. 6.3. Accounting principles (Danish GAAP) Same as paragraph 5.3. 6.4. Annual report and financial statements Same as paragraph 3.4. 6.5. Auditing/disclosure/publication Same as paragraph 5.5. 7. Limited Partnership Company ( Partnerselskaber, P/S)

7.1. General overview The Limited Partnership Company ( Kommanditaktieselskab or Partnerselskab , the latter abbreviated as "P/S") (i.e. a commercial Limited Partn ership with a Public Limited Company acting as limited partner with its entire share capital or where the limited partners have contri buted a certain amount divided i n shares) is a variety of the Limited Partnership. The general partner is required to have managerial and financial powers in the Limited Partnership Company. The Public Companies Act ( Aktieselskabsloven ) regulates certain aspects of the Limited Partnership Company relating to formation, power to sign for the company, the content of the article s of association, and registration. 7.2. Accounting records Same as paragraph 3.2 . 7.3. Accounting principles (Danish GAAP) Same as paragraph 3.3. 7.4. Annual report and financial statements Same as paragraph 3.4. 7.5. Auditing/disclosure/publication Same as paragraph 3.5. 8. Co-operative Limited Companies ( Andelsselskaber med begrnset ansvar , AmbA)

8.1. General overview The Co-operative Limited Companys objective is to promote the common interests of its members and to distribute profits or proceeds among its members in proportion to each members share of the turnover of the business. A typical Co -operative Limited Company consists of buying goods from the participants of the co -operative and selling them to third parties for a profit. There is no specific Co -operative Limited Co mpany law in Denmark. Accordingly, it is advisable to draw up a co -operative agreement between members. A few requirements for registration, merger and de -mergers and resolution etc. for co operatives are regulated in the Act on Certain Commercial Undertak ings (Lov om visse erhvervsdrivende virksomheder ). 8.2. Accounting records Same as paragraph 3.2.

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8.3. Accounting principles (Danish GAAP) Very small Co -operative Limited Companies will have to follow the requirements in Financial Statements Act, class A see below in Section Annual report and financial statement. A Co-operative Limited Company below the criteria mentioned in Section 8.4. is allowed to present a financial statement based on tax rules only. Small and medium -sized Co-operative Limited Companies will have to follow the requirements in class B or C depending on the size of the company as described in paragraph 3.3. (see tables). 8.4. Annual report and financial statements Financial Statements must be prepared in accordance with Financial Statements Act, cla ss A if the undertaking on the balance sheet date exceeds two of the following three criteria: Net assets DKK 4.000.000 (about 537.000); Net turnover DKK 10.000.000 (about 1.342.000); 10 full time employees on average during the financial year.

Larger Co-operative Limited Companies have to follow class B or C depending on the size of the company. 8.5. Auditing/disclosure/publication Danish Co-operative Limited Companies following the accounting requirements in class B or C must prepare audited financial stat ements. Co -operative Limited Companies in class A are not required to present audited financial statements. Danish Co-operative Limited Companies following the accounting requirements in class B or C are required to file their Annual Report including fina ncial statements and Directors Report (if required) with the Danish Commerce and Companies Agency as soon as possible after the General Meeting which approved the financial statement and no later than five months after balance sheet date. The annual repo rt must include a Directors Report (DR) including comprehensive description of the development in the companys financial activities and position. If the financial statements have been significantly affected by unusual circumstances or there have been sig nificant uncertainties relating to the preparation of the accounts, information to that effect should be given in the DR. The information must be given separately and, if possible, the amounts involved must be stated. The DR must also give information on:

Important events occurring subsequent to the accounting year -end The companys expected future development Research and development activities The companys branches in foreign countries if applicable

Small Co -operative Limited Companies in class A are exe mpted from preparing a DR. Small Co-operative Limited Companies in class B are exempted from preparing a economic environment or activities have occurred . DR if no significant changes in the

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9.

Sole proprietorship ( Enkeltmandsvirksomhed )

9.1. General overview In a sole proprietorship ( Enkeltmandsfirma ), the owner has unlimited liability. Registration with the Commerce and Companies Agency is mandatory. There is no specific sole proprietorship law in Denmark. A few requirements for registration of sole propriet orship etc. are mentioned in the Act on Certain Commercial Undertakings ( Lov om visse erhvervsdrivende virksomheder ). 9.2. Accounting records Same as paragraph 3.2. 9.3. Accounting principles (Danish GAAP) A sole proprietorship can choose to follow the Danish Finan cial Statements Act, clas s A or it can choose to prepare a set of financial stat ements based on tax rules. For f urther description see paragraph 3.3. 9.4. Annual report and financial statements Same as paragraph 3.4. 9.5. Auditing/disclosure/publication Sole proprie torships do not have to prepare audited financial statements. Sole proprietorships are not required to file their Annual Report with the Danish Commerce and Companies Agency. Moreover, there are n o requirements for a Directors Report (DR) in class A . 9.6. Reference Public Limited Companies Act ( Aktieselskabsloven ) Consolidation Act No. 324 of May 7 th, 2000; th Private Limited Companies Act ( Anpartsselskabsloven ) Consolidation Act No. 325 of May 7 , 2000; Act on Certain Commercial Undertakings ( Lov om visse erhvervsdrivende virksomheder ) Consolidation Act no. 546 of June 20 th, 1996; th Danish Bookkeeping Act (Consolidation Act No. 648 of June 15 , 2006); Danish Financial Statements Act (Consolidation Act no. 647 of June 15th, 2006). 9.7. Further supplementary comments The above description of the legal, auditing and accounting requirements etc. for the different types of companies in st Denmark is mainly based on existing rule s as per December 31 , 2009. About the Danish Financial Statements Act it is important to add that Denmark had a new rewritten accounting law back in 2001. This new law was of course based on 4th and 7th EU directives but also primary based on the recogn ition and measurement requirements in IAS (International Accounting Standards) in the 2001 version of the standards. No major updates to IFRSs and IASs have been made since. On the other hand the Danish Government has been very much focused on reducing adm inistrative burdens for entities. This focus has led to several changes in the Danish Financial Statements Act in the period from 2004 -2008. The Danish Financial Statements Act is also on many areas in line with IFRS for SMEs. In Denmark we have a new Companies Act coming up which will have effect from approx imately 1 st March 2010. The new Companies Act is a joint law covering both Public Limited Companies and Private Limited Companies. Furthermore it is expected that all filing of financial statements with the authorities will have to be in XBRL format. At present it is not known when this requirement will be effected.

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