All You Need to Know for Successful Director Changes in Denmark

When planning to change a director in a Danish company, you must first conduct several essential assessments and preparations to ensure legal compliance and a seamless transition. A crucial first step involves thoroughly reviewing the company’s Articles of Association to confirm the current director’s powers of representation. This review will help you identify any amendments needed to transfer or redefine these powers effectively.

What Are the Legal Compliance Requirements?

Typically, an officer’s legal appointment term in Denmark lasts until the next Annual General Meeting (AGM). However, you can benefit from the flexibility of retroactive appointments, as the effective date usually matches the one noted in the meeting minutes.

To meet compliance standards, you must:

Register the new director with the Danish Business Authority within 14 days to prevent penalties or the nullity of decisions.
Ensure the incoming director has full legal capacity and is not under guardianship.
Confirm directors are at least 18 years old and natural persons, as corporate directors are prohibited.
Remember that Denmark has no nationality or residency restrictions for directors.

Organizational Structure of Companies in Denmark

In Denmark, private limited companies typically adopt one of two management structures:

A Board of Directors and an Executive Board, or
Only an Executive Board that handles all responsibilities.

Public limited companies usually follow a two-tier system:

A Board of Directors managing strategic decisions, with daily operations conducted by the Executive Board, or
A Supervisory Board overseeing the Executive Board, which handles both strategic and operational tasks.

For public companies, at least three board members are mandatory, with a majority not participating in the Executive Board. Additionally, the Chairperson cannot simultaneously hold an executive role.

Conducting Meetings Effectively

To ensure productive board or supervisory meetings, schedule them well in advance to maximize attendance. Begin by clearly preparing the agenda and distributing necessary documents ahead of time. During the meeting, the Chairperson should facilitate discussions, keeping everyone on task and ensuring full participation. Importantly, more than half of the members must be present to achieve quorum, with decisions typically requiring a simple majority unless specified otherwise by the Articles of Association.

Documentation Process for Director Changes

When electing or removing directors, accurate documentation is essential. First, propose the decision in a board meeting or through a written resolution. Shareholders must then approve this decision. Following approval, document the resolution clearly in the meeting minutes, ensuring all present members sign them. Finally, submit these minutes and supporting documents—such as the incoming director’s ID or passport copy and resignation letters—to the relevant authorities.

Specific Steps for Resignation or Removal

Directors may resign anytime by providing written notice to the board, and if appointed by a particular shareholder or parent company, also inform them accordingly. If a replacement isn’t immediately available, remaining board members should quickly arrange the election of a new director. Alternatively, if the board can still form a quorum, postponing this until the next AGM may be acceptable.

Required Filing Information and Deadlines

Upon appointing a new director, submit the following details to the Danish Business Authority within 14 days:

Full name
Residential address
Proof of address
Effective appointment date

Once filed, these details become publicly accessible through the Danish Central Business Register.

Importance of Proper Management

Efficient management of officer changes ensures compliance with Denmark‘s corporate governance standards and helps businesses operate smoothly. Companies that handle these changes effectively avoid penalties and disruptions. Klea’s expertise in corporate governance across multiple jurisdictions, including Denmark, enables businesses to navigate these changes efficiently while ensuring compliance.

Book a demo today and unlock smarter corporate governance. For more insights into processes in other jurisdictions, explore our article, Estonian AGMs Made Easy: What You Need to Know for Transparency, Triumph, and Legal Results.