ApS and A/S companies look a lot like each other at first glance, because they are both capital companies, which means that the company’s finances are completely separate from the owners’ private finances. This also means that your personal finances are protected in the event of loss of the company, with both forms of company.
But what are the differences between ApS and A/S?
One of the most significant differences is the initial capital required to start either an ApS or A/S. An ApS requires an initial capital of DKK 40,000, while it requires a whopping DKK 400,000 to start an A/S. Other differences are in the management of the two companies. In the case of a private limited company (ApS), the management must consist of at least one executive board, where in a limited company (A/S) there must be both an executive board and a board of directors. A limited company can also, unlike a limited company, be listed on the stock exchange. Which means that the limited company may have released shares on the stock exchange that will be able to be traded.
These were some of the differences between ApS and A/S, but which company form is the best?
Whether you want to set up a limited liability company or a limited liability company depends on what the purpose of the company is.
If you want to start a company where you don’t need the biggest investors and business partners, and would like to start with a smaller starting capital, then a private limited company might be right for you.
Conversely, if you want to start a company where large investors and business partners must be involved, and if you have the start-up capital, a limited liability company might be right for you.
Both forms of company have their advantages and disadvantages. The biggest advantage of both forms of company is clearly the limited liability, in that your personal finances are protected against, for example, a possible bankruptcy.
Starting a business in general requires a lot of thought. It also does so when setting up either a joint-stock or limited liability company. Therefore, it is important that you familiarize yourself with the two forms of company, and find what makes the most sense for you now and in the future.
