Company form and liability (selskabsform og hæftelse)
Also known as company form, legal form of business, sole proprietorship, aps, selskabsform, virksomhedsform, enkeltmandsvirksomhed
The company form determines who is liable for the debt — and therefore whether there is anyone to pursue at all once the company is empty.
In practice
The first thing to look up on a new debt collection case is not the amount. It is the company form.
If the debtor is an ApS or an A/S (the Danish private and public limited company), the owner is not personally liable. If the company goes bankrupt, the claim is gone — however wealthy the owner may be privately, and however unfair it feels. Unless there is a personal guarantee.
If the debtor is a sole proprietorship (enkeltmandsvirksomhed) or an I/S (general partnership), the proprietor is liable with their entire private assets. Then there is something to go after, even once the business has closed.
That determines whether the case is worth pursuing — and it determines what you ought to have asked for back when you granted the credit.
Where it commonly goes wrong
- A newly formed ApS with no equity is granted the same credit as a well-established personally owned business. The risk is not the same, and the price should not be either.