Greenland: New rules concerning CVR registration and modernisation of company legislation - how does this affect Greenlandic companies?

REGISTRATION OF GREENLANDIC COMPANIES IN THE CVR REGISTER

Like Danish companies, Greenlandic companies are to be registered in the CVR register in the future. The change will come into force on 1 January 2018 when Greenland’s Business Register (GER) is closed.

Existing Greenlandic companies will automatically be transferred to the CVR register, and the existing GER numbers will be converted to CVR numbers.

Today, Greenlandic limited companies (A/S, ApS, etc.) are, in addition to being registered in the GER, also registered in the CVR register with an A/S or ApS registration number.

The GER contained approx. 6,000 active legal entities of which almost half were sole proprietorships and approx. 1,000 were limited companies. The remaining legal entities were registered as a number of other corporate form such as partnerships, limited partnerships, foundations and public entities.

MODERNISATION OF COMPANY LAW HOW DOES THIS AFFECT GREENLANDIC COMPANIES?

Soon, Greenlandic companies will have the same opportunities as Danish companies have had since 2010 when the Companies Act in its present form came into force in Denmark.

At the beginning of 2018, the Business Authority will announce the specific date on which the Companies Act will come into force in Greenland. In this connection, the Financial Statements Act and the Act on Commercial Foundations will be updated.

For Greenlandic companies, this means the possibility of:

  • Lower capital requirements for private limited companies (minimum DKK 50,000)
  • Making partial payment of share capital upon foundation (minimum 25 %), while the rest must be paid gradually as the company will need the funds (with owner liability)
  • Establishing entrepreneurial companies (IVS) with a capital of DKK 1
  • Issuing non-voting shares
  • A supervisory board as a new management body
  • Administrative easements in relation to document drafting in case of e.g. a merger or demerger
  • Public register of shareholders
  • Shareholders’ agreements will not be binding on the company and the resolutions adopted at the general meeting

Consequently, a service check may be required of existing shareholders’ and articles of association to ensure that any special rights/obligations agreed may be enforced vis-á-vis the company and the owners in case of a conflict or disagreement.

Horten provides advice in relation to Greenlandic legal issues, including registration of companies. You are welcome to contact us if you need a service check or have any questions regarding the CVR registration and the modernisation of company legislation in Greenland. 

contacts

Søren Hornbæk Svendsen

Partner

Helen Kibsgaard

Senior Attorney