On 2 May 2019, the Danish Parliament adopted a bill introducing new supplementary provisions regarding the obligation of companies, foundations and associations to obtain, store and register information about their beneficial owners. The amending act comes into force on 10 January 2020.

Potential compulsory dissolution in case of insufficient registration or failure to observe the obligation to store information
The Danish Companies Act (selskabsloven) states that companies may become subject to compulsory dissolution in case of insufficient registration of beneficial owners. The amendment act increases the possibility of compulsory dissolution of companies so that compulsory dissolution can take place 1) if the registration of beneficial owners is insufficient or 2) if the company has not stored documentation of the information about the company’s beneficial owners, or if the company has stored insufficient documentation.

The possibilities of dissolving a commercial foundation are increased correspondingly.

Introduction of annual obligation for companies to conduct checks
At least once a year, companies shall conduct checks to see whether there are any changes in the registered information about beneficial owners. The result of the annual checks is to be presented at the meeting where the central management body approves the annual report.When justified due to the situation of the company, the company will, according to the explanatory notes to the act, have to conduct more than one annual check regarding the information on ownership and control.

The obligation to conduct checks does not change the fact that the company is obligated to make a registration with the Danish Business Authority as soon as possible after having learnt about the changes in the information on beneficial owners. If the check leads to an amendment of the registered information, the registration is not to await the presentation of the check to the central management body.A corresponding obligation to conduct checks is imposed on commercial foundations and other foundations. As regards commercial foundations, the result of the check is to be presented at the foundation’s annual report meeting.

Obligation for owners to inform the company of ownership
An obligation is introduced for anyone who owns or controls, directly or indirectly, companies upon request to provide the company with the information necessary for the company’s identification of beneficial owners, including information about the rights of the beneficial owners. The purpose of the obligation to provide information is to make it easier for the company to identify its beneficial owners.

The obligation to provide information applies to all owners, both natural persons and legal entities, but only at the request of the company. Therefore this is not an actual obligation to provide information on one’s own accord as known from the rules regarding legal owners. The owners shall provide information about any known ownership. If the owner is a natural person, this will only include information in downward direction, meaning information about whom the individual owns. If the owner is a legal entity, it includes information in both downward and upward direction, meaning information about whom the legal entity owns and who owns the legal entity.

A corresponding obligation is introduced for the beneficial owners of commercial foundations and other foundations.

Obligation for companies to provide information about ownership in connection with implementation of KYC (Know Your Client) procedures
It is emphasized that upon request companies must provide individuals and companies performing KYC procedures with information about the company’s ownership structure.

A corresponding obligation is introduced for commercial foundations and other foundations.

For additional information and advice please contact Attorney-at-law Henriette la Cour/ hlc@nrlaw.dk, Attorney-at-law Karin Absalonsen/ kab@nrlaw.dk or Attorney-at-law Ida Hauge Thaning/ iht@nrlaw.dk.

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