In Denmark, the owner of a company has the right to deregister the audit requirement after the company has been incorporated. This can be done by entering the relevant information in the incorporation document, which is known as „fravælge revisionspligt” in Danish.
In Denmark, for ApS and IVS limited liability companies, meeting two out of three required recommendations is necessary to avoid mandatory audit:
- The company should have an average number of full-time employees of 12 or less in a given fiscal year.
- The balance sheet total, which is the total of debts or assets, should not exceed DKK 4 million.
- The net turnover, which is the total revenue minus any returns and discounts, should not exceed DKK 8 million per year excluding VAT.
Holding companies in Denmark are those that hold a controlling amount of shares in other companies, typically at least 20% ownership. To avoid mandatory audit as a holding company, the same requirements as for limited liability companies must be met, namely a maximum net turnover of DKK 8 million, an average of 12 or fewer full-time employees, and a balance sheet total of no more than DKK 4 million. However, the values for all companies in which the holding company has shares must be combined, which means that the total number of employees, net turnover, and balance sheet total of all the companies in which the holding company has shares must be considered.
If a limited liability company in Denmark has been conducting an annual audit for many years, it can be deregistered at the annual shareholders’ meeting by passing a resolution that the audit will not be necessary in the following year. To deregister the company’s audit, the resolution must be made during the annual shareholders’ meeting:
- Record the relevant information related to the deregistration in the minutes of the meeting.
- Agree on an amendment to the Articles of Association, removing all provisions related to the audit requirement.
- At the end of the year, when completing the company’s annual report, it should be noted that the conditions for not being audited have been approved during the shareholders’ meeting.
Unlike limited liability companies and holding companies in Denmark, sole proprietorships have not been required to conduct audits since 2006.