An Overview of Auditor Requirements and Annual Reporting in Denmark

In Denmark, a company owner can opt out of having audits conducted on their company by indicating their decision in the incorporation document. This is known as "fravælge revisionspligt".

In the case of ApS and IVS limited liability companies, meeting at least two out of the three required recommendations would exempt them from mandatory audits:

1. The average number of full-time employees at the company during a given fiscal year should be 12 or less.
2. The total of the company's debts and assets, also known as balance sheet total, should not exceed DKK 4 million.
3. The company's net turnover should not be more than DKK 8 million per year, excluding VAT.

Holding companies are a type of Danish business that holds a significant amount of shares, usually 20%, in other companies. In order to avoid mandatory audits, holding companies must fulfill the same requirements as limited liability companies, including having a turnover of DKK 8 million, 12 or fewer full-time employees, and a balance sheet total of DKK 4 million or less. However, for holding companies, these values must be calculated by combining the values of all the companies in which they hold shares.

If a limited liability company has had an annual audit requirement since its establishment many years ago, it is possible to deregister the audit at the annual shareholders' meeting. The company can establish that an audit will no longer be necessary starting from the following year.

To deregister the audit, the decision must be made during the shareholders' meeting:

• Record the relevant information about the decision in the minutes of the meeting.
• Agree to amend the company's Articles of Association, removing any provisions related to the audit.
• When completing the company's annual report at the end of the year, make a note that the conditions for being exempt from audit have been approved.

Unlike limited liability companies and holding companies in Denmark, sole proprietorships have not been required to undergo audits since 2006.