OASIS
ORGANIZATION OF ADVOCATES SPECIALISING IN INTERNATIONAL SERVICES
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ORGANIZATION OF ADVOCATES SPECIALISING IN INTERNATIONAL SERVICES
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DANISH DEVELOPMENTS 2009/2010Ole Meisner, KAALUND & PARTNEREMDigitalisation of the Danish Land Registration system The Danish land registration system has been through a revolutionary transition - on a European scale. As of 8 September 2009, the registration of land (real estate) in Denmark changed to an almost paperless system, replaced by an advanced digital registration system (electronic registration). It is now be possible to register, almost immediately, via the Land Registry’s website, www.tinglysning.dk, by the use of a digital signature. Most communication will be digital and the applicant will no longer be issued with a physical paper document recording his rights. In preparation for the digitalisation process, more than 70 million pages from all the judicial districts have been scanned into the system. The Land Registry is now centered in The court of Hobro, in Jutland.
Life Science Vitamin and Minerals in Food Supplements The transitional period of the Food Supplements Directive expired on 31 December 2009. Member States are no longer allowed to use vitamin and mineral substances in food supplements which are not listed in Annex I and Annex II of the Directive. The European Commission has prepared a Draft Commission Regulation with the purpose of amending Annex I and Annex II of the Food Supplement Directive (and Regulation 1925/2006/EC on the addition of vitamins and minerals and of certain other substances to food). According to this draft Regulation, two new minerals are added to Annex I and more than 60 new sources of vitamins and minerals are added to Annex II. The amendments of Annex I and Annex II – if adopted in current form – will provide the European food supplement industry with a wider spectre of vitamin and mineral ingredients to choose from. As for Denmark, the additions to the Annexes will provide the Danish food supplement industry with almost 60 new substances which were not previously allowed to be used. Food supplement businesses will experience that ingredients used in their products are no longer allowed. In Denmark approximately 20 nationally allowed vitamin and mineral substances have not been included on the amended lists by the Commission.
Company Law The first part of the new Danish Companies Act took effect from the 1st of March 2010. The Act regulates public limited companies (“A/S”) and private limited companies (“ApS”). The Act modernises and simplifies the overall regulation. Listed companies are subject to special regulation. Some of the simplifications of the Danish company law regime, that can be of particular interest to non-Danish clients, are described below: Governance structure Public and private limited companies may choose between alternative governance structures, - the traditional Danish governance structure where an executive board performs the day-to-day management of the company and a board of directors exercises overall and strategic management functions as well as certain supervisory functions (the so-called “one-and-a-half tier” governance structure) - a two-tier (German-inspired) governance structure where all the management functions are vested with an executive board and a supervisory board performs only supervisory functions - a one-tier (Anglo-Saxon-inspired) governance structure, which is only available to private limited companies, where the company is managed only by an executive board. A public limited company may adopt a governance structure somewhat similar to a one-tier governance structure by allowing all members of the executive board to also be directors; however, a majority of the directors must be non-executive (meaning that they may not be members of the executive board) General meetings The new Danish Companies Act introduces more flexible rules on the convening and holding of general meetings by permitting the use of written resolutions rather than physical or virtual general meetings. By unanimous decision, the shareholders of a company may agree to waive the formal requirements of the Act and the company’s Articles of Association applicable to general meetings. Such waiver may either be given in respect of a specific general meeting or in general. A general waiver must be incorporated into the company’s Articles of Association. In any event, shareholders representing more than 10% of the company’s share capital may require a physical general meeting. If a physical general meeting is to be convened, the minimum notice period for convening the meeting as well as making available certain documents for inspection at the company’s office has been extended from eight days to two weeks (however, under the transitional rules, the first general meeting convened in listed companies after 1 March 2010 may be convened (i) with up to five weeks’ notice, irrespective of any shorter notice period stipulated in the Articles of Association; or (ii) with less than three weeks’ notice, provided that such shorter notice is set out in the Articles of Association). The motive behind this amendment is to accommodate foreign shareholders for whom eight days’ notice may be insufficient. Company Articles of Association may provide that general meetings can be convened on the company’s website. However, notice convening the general meeting must be sent to all shareholders registered in the company’s register of shareholders upon request. To promote active ownership in Danish companies, current restrictions on the duration and scope of proxies are maintained for proxies given to the board of directors (and the executive board) of a company, but relaxed for other proxies. Accordingly, a proxy issued to the board of directors (and the executive board) may only be valid for a twelve-month period and for a specific general meeting with an agenda known at the time the proxy is issued. Under the new Act, a proxy issued other than to the board of directors (and executive board) may be indefinite and general in nature. Language If a company’s Articles of Association stipulate Swedish, Norwegian or English as the group’s official language, meetings of the board of directors or the supervisory board may be conducted in such language without simultaneous translation into Danish, and directors or supervisory board members will not have the right to require documents in the official group language to be translated into Danish. If a company’s Articles of Association do not stipulate Swedish, Norwegian or English as the official group language, meetings of the board of directors or the supervisory board may only be conducted in a language other than Danish if simultaneous translation into Danish is provided upon request, and directors or supervisory board members will have the right to require documents in a foreign language to be translated into Danish. The new Danish Companies Act permits general meetings to be held in a language other than Danish. Thus, the general meeting may resolve by a simple majority of votes to conduct general meetings in Swedish, Norwegian or English without providing simultaneous translation into Danish to all the participating shareholders. However, if the language being approved is another foreign language than Swedish, Norwegian or English, and simultaneous translation into Danish is not provided, such a resolution will require approval by nine-tenths of the votes cast as well as nine-tenths of the share capital represented at the general meeting. It is expected that the Danish Commerce and Companies Agency will accept registration of corporate documents in Swedish, Norwegian or English.
Shareholders’ Agreements The new Danish Companies Act settles an ongoing debate among Danish company lawyers by explicitly providing that shareholders’ agreements have no binding effect on the company or the decisions passed by the shareholders at general meetings. Consequently, many typical shareholders’ agreement provisions may be more difficult to enforce. Consideration should be given to including certain shareholders’ agreement provisions in the company’s Articles of Association. However, Articles of Association are publicly available through the Danish Commerce and Company’s website and confidentiality considerations may exclude this possibility. In light of the limitation on the enforceability of shareholders’ agreements described above, it will be important to consider consequences of a breach of shareholders’ agreements.
Labour law Stricter duty to notify The Danish Government recently introduced a Bill proposing a stricter duty to notify for employees posted to Denmark. When a foreign enterprise posts employees to Denmark to provide services, it must file certain details with the Danish Commerce and Companies Agency to ensure compliance with Danish law. The Bill is intended to ensure that the Danish rules on posting of employees are enforced and observed and also that the social partners are able to contact foreign service providers. Its most important features include an extension of the rules about the stricter duty to notify to also include independent enterprises without employees and a stricter penalty for failing to notify. Also, the Danish Working Environment Agency would monitor compliance with the duty to notify in future. A last and very substantial feature is also that in the building and construction industry, principals would now be required to ensure they are able to show that a foreign service provider has filed the necessary information with the Danish Commerce and Companies Agency. This means that Danish businesses and private individuals risk being fined if they have work or services performed for them by posted employees in the building and construction industry and fail to make sure that the necessary filings have been made. The Bill also proposes authorising the Minister for Employment to extent the principal’s duty to notify to other industries as well. |
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Organization of Advocates Specialising in International Services
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