Which business form should I choose?
Last updated 26/08/2025 – Reading time: 2 min
When you start or run a business in Denmark, you have to choose between different business forms.
The choice has a major impact on tax, liability, responsibility and capital, so it’s important to choose the right structure from the start.
Below you’ll find an overview of the most common types of businesses and their pros and cons.
Sole proprietorship (EMV)
A sole proprietorship is the simplest form of business and requires no initial capital. The owner is personally liable for the debts and obligations of the business and profits are taxed as personal income.
Benefits:
- Quick and easy startup
- No capital requirements
- Suitable for self-employed and freelancers
Disadvantages:
- Personal liability
- Limited opportunities for growth
Partnership (I/S)
A partnership is run by two or more owners who share both profits and liability. Each partner is personally and jointly liable, which means you are also liable for your partners’ debts.
Benefits:
- Flexible way of working
- Requires no start-up capital
Disadvantages:
- Personal liability for both parties
- Risk of disagreements between owners
Private limited company (ApS)
A private limited company requires a minimum capital of DKK 40,000 and is an independent legal entity.
The owner is only liable for the amount contributed and the company pays corporate tax on its profits.
Benefits:
- Limited liability
- Possibility for multiple owners
- Better credibility with business partners
Disadvantages:
- Requires start-up capital
- More administrative requirements
Public limited company (A/S)
A limited liability company is typical for larger companies in need of raising capital.
The requirement is a capital of DKK 400,000 and the company must have a board of directors.
Benefits:
- Opportunity for investment and growth
- Access to more owners and investors
Disadvantages:
- High set-up costs
- More regulatory and audit requirements
Comparison of business forms
Which business form is right for you?
The choice depends on how much risk you want to take, how much capital you can invest and how you want to be taxed.
At Accountview, we are happy to advise you on the choice of business form and help you set it up from the start.