Entrepreneur Companies Abolished in Denmark and Belgium – For Very Different Reasons and with Very Different Results

13 Pages Posted: 13 Dec 2019

Date Written: December 13, 2019


The article begins with a historical view on the legal development of minimum capital requirements for the private limited companies in Europe. An introduction to the historically very different approaches in Germany and England is given, and it is shown that the international trend moves towards the English regime where creditor protection largely rests on the responsibility of company members or management towards the company and its creditors. The Belgian entrepreneur company (SPRL-starter) and the Danish entrepreneur company (IVS) were introduced in 2010 and 2014, respectively. In both countries, they were introduced to avoid a boom of branches of foreign companies after the cases from ECJ, Centros, Überseering and Inspire Art. In April 2019, the opportunity to establish new entrepreneur companies was abolished in Denmark, and in May 2019, the same happened in Belgium. Even though it could indicate that the legal development in the two countries were alike, nothing could be more misleading. While Belgium followed the international trend and in reality abolished the minimum capital requirement for private limited companies, Denmark just abolished the IVS, while no real alternative to branches of foreign companies was introduced, leaving Denmark with the second highest minimum capital requirement in Europe, with a receding number of new businesses. At the same time, it leaves Denmark in the danger zone of having an invasion of branches of foreign low capital companies, with Danish entrepreneurs as shareholders.

Keywords: Company law, Entrepreneur company, Danish law, Belgian law, Creditor protection

JEL Classification: K20, K22, G38

Suggested Citation

Lilja, Troels Michael, Entrepreneur Companies Abolished in Denmark and Belgium – For Very Different Reasons and with Very Different Results (December 13, 2019). Copenhagen Business School, CBS LAW Research Paper No. 19-43, Available at SSRN: https://ssrn.com/abstract=3503308

Troels Michael Lilja (Contact Author)

Copenhagen Business School - CBS Law ( email )

Porcelaenshave 18B, 1
Frederiksberg 2000

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