The Ministry of Industry has published a consultation invitation letter on a bill for a decree to the Greenlandic Companies Act which is expected to take effect as from 1 January 2022. The amendments involve a number of changes which Greenlandic companies must observe.
Requirement to register beneficial owners. Risk of compulsory dissolution if lack of registration.
The bill introduces the term beneficial owner in the Greenlandic Companies Act. Beneficial owners must not be confused with legal owners who are the direct owners of a company. The beneficial owners are the natural persons who ultimately directly or indirectly controls more than 25 percent of the share capital or votes of a company. The control can be indirectly through a corporate structure, assignment by agreement or pledge.
As of 1 January 2022 it will be mandatory for all companies to register its beneficial owners. The requirement to register also applies if the beneficial owners are identical to the legal owners. The Danish Business Authority’s powers to refer companies to compulsory dissolution under sec 225 also applies if a company has not registered its beneficial owners.
Nuna Law offers assistance to register beneficial owners.
Reduction on the required minimum share capital
The minimum share capital required to incorporate a company is reduced from DKK 50.000 to DKK 40.000 for private limited companies (anpartsselskaber (ApS)) and from DKK 500.000 to DKK 400.000 for public limited companies (aktieselskaber (A/S)).
Increased options for company financing to its shareholders
The bill expands the possibility for a company to advance funds, make loans, or provide security to the company’s shareholders or management.
It is required that such financing is provided within the funds that can be distributed as dividends and the finance is provided on terms that follows market conditions, and resolved by the general meeting or a supreme gerning body authorized by the general meeting.
Phase-out of DKK 1 entrepreneur companies (iværksætterselskaber)
As from 1 January 2022 it will no longer be possible to establish an entrepreneur company in Greenland. The main characteristic of the entrepreneur company is that the company is a limited liability company with a required minimum share capital of DKK 1. Existing entrepreneur companies must be converted to a private limited company before 1 January 2024. Companies not converted will be referred to compulsory dissolution by the Danish Business Authority.
For inquiries and questions, please feel free to contact attorney-at-law Thor Suhr.