I hope that is ok if I post this in English. If it is easier for you, you can reply in Danish (my reading in Danish is far better than writing), I apreciate every input! My question is as following: Me and my partner want to register a company as an ApS, to make an apparel brand here in Denmark. The business is based on creating an selling a consumers product. We are wondering, after we register the company and have those 40.000 kr in the business' bank account, if we can the use that sum to pay the manufacturers to produce our product, and then have the money from the sales be put back in the account by the end of the financial year. Let's imagine this concrete scenario: We have the 40.000 kr as the initial social capital in the bank. We need to pay the manyfacturer 25.000 kr for our first batch of products (our initial stock that we are going to sale). Can we then take this from our social capital amount => 40.000-25.000 kr and be left with 15.000 kr until we manage to put it back by the end of the financial year? If so, do we need to file a document with virk.dk or any other danish authority to specify why are we spending the social capital and when are we going to have it put back? When does it need to be filed? We want to be sure we are not going to have any issue with the Business Authority or Skat.
I hope I made my issue clear and somebody can offer a clear solution or example. Thank you in advance for your reply!
Yes, the capital provided by you to the ApS can be used by the ApS for expenses and investments. No reporting is needed.
Before you start the company, you should spend a little time to fully understand requirements in respect to bookkeeping, insurance, annual report and annual tax reporting.
Thank you for the fast reply! This is very encouraging for us, as we were not sure and thus presented difficulties in kickstarting our venture. We are actually trying to take care of those matters as well, besides the actual product development. Hopefully, a more in-depth discussion with an accountant will solve some of our questions. Many thanks again.
As John points out, if less than 20.000 kr is left from the company equity, then money should be added by the owners to 20.000 minimum. Theoretically an accountant? can probably be hires to value your stock (valuation report) and by doing that no further money need to be added. But again it would probably be easier and more inexpensive to establish an ApS with 60.000 kr as equity. This will allow you to "spend" up to 29999 kr. and still have >50% left of equity in bank.
"if less than 20.000 kr is left from the company equity, then money should be added by the owners to 20.000 minimum"... Sorry, but this is simply not true. There is nothing that prevents an ApS from even significant negative equity as long as cash is available from loans or similar sources.
If you lose more than half of equity, you are required to make a plan for how to restore it, but it doesn't have to be short-term. You can just call an assembly and note that you plan to restore equity through your business activities in the coming years. As long as you aren't being blatantly irresponsible, you should be fine
Also in regards to the original post: Spending equity capital on goods, does not per say reduce the equity. Your stock value is now 25.000 goods + 15.000 currency, the company is therefor still in control of the original 40.000kr equity.
Spending on advertising, rent etc. which does not have a value once spent, directly reduces teh equity. And as others have written, as soon as you know you go below 50% of the original fixed equity (it could be more than 40.000) you have to have an assembly and make a plan to restore it.
Your finance program should be able to give you a direct equity value, if the books are kept updated.