Who Can Sign for a Danish Company?

What foreign counsel need to know about signing rules, powers of attorney, e-signatures and notarisation before a Danish closing.

Cross-border transactions with a Danish party tend to raise the same questions in the lead-up to signing. Who can lawfully bind a Danish company? Can its signatories sign electronically? Does anything need a notary, an apostille, or even legalisation?

The answers are short, because Danish law imposes few formalities. The points to consider lie elsewhere. They include the registered signing rule, the difference between authority and internal approval, and the various registers that keep their own procedures. This guide sets out the position to note for transaction lawyers outside Denmark.

The Signing Rule

A Danish limited company is bound in accordance with its signing rule (tegningsregel). This applies to private companies (anpartsselskab, ApS) and public companies (aktieselskab, A/S) alike.

Every company must register its signing rule with the Danish Business Authority (DBA). The signing rule is normally set out in the articles of association and appears in the company's entry in the Central Business Register (CVR), which anyone can search online free of charge. The CVR entry also shows the members of the board of directors (bestyrelsen) and the executive board (direktionen), and the date of the current articles of association, but not the articles themselves. The articles are not online and must be ordered from the DBA, if not provided directly by the company. Note that the signing rule is registered in Danish and the articles are filed in Danish (or, rarely, Norwegian or Swedish), so any English translation is solely for convenience.

If the articles of association contain no signing rule, the statutory default applies. Each member of the board of directors and each member of the executive board can then bind the company alone. One signature suffices.

Most companies with a board restrict this in their articles. A typical rule requires the chairman to sign jointly with a member of the executive board, or two executive board members to sign jointly. The full board of directors can always bind the company, whatever the articles say on combinations.

The articles can restrict signing powers in two ways. They can require several members to sign jointly, or limit the power to specific members, identified by function, such as chairman of the board of directors or managing director (administrerende direktør), or exceptionally by name. The registered signing rule cannot vary by type of transaction.

The articles can, however, reserve particular transactions, such as disposals or mortgages, for the shareholders or the full board of directors. In a company with a board of directors, matters outside day-to-day management need the board's authorisation in any event. Such reservations do not change the registered rule, but a counterparty that has (or should have) seen the articles cannot safely rely on the signing rule alone if an approval is missing.

Members of a supervisory board (tilsynsråd), which some companies have instead of a board of directors, cannot sign for the company. A rule requiring a board member to sign jointly with a member of the executive board needs two individuals, even where one person holds both positions, unless the rule provides otherwise.

Board of Directors and Executive Board

A Danish direktør is not a director in the English sense. A Danish company may have a board of directors (bestyrelse), which handles overall and strategic management, and an executive board (direktion), which runs the day-to-day business. The executive board consists of one or more managers (direktører) and reports to the board of directors.

A private company may have an executive board only. A public company must have an executive board and either a board of directors or, in rarer cases, a supervisory board. A direktør may or may not also sit on the board of directors, and the CVR lists the two bodies separately. Signature blocks and certificates should describe each signatory by the position registered in the CVR.

Authority and Approval

The signing rule governs authority towards third parties. It does not replace internal approval, and the two can diverge. A signature in line with the registered rule binds the company even if the signatories lacked internal approval. This position broadly corresponds to Turquand's rule under English common law.

There are three exceptions. The company is not bound where the signatories acted in breach of limits on their powers set by the Companies Act, for example by deciding a matter reserved for the general meeting. This applies even if the counterparty acted in good faith. Nor is it bound where they exceeded their authority or materially disregarded the company's interests, and the counterparty knew or ought to have known.

A transaction outside the company's objects binds the company unless the company proves that the counterparty knew or ought to have known. Registration of the objects clause in the CVR does not by itself prove that.

For these reasons, Danish practice in finance transactions is to obtain a board resolution. It approves the transaction documents and authorises named signatories. Where a Danish company guarantees or secures the debts of its parent or a sister company, the resolution also records the corporate benefit.

Such guarantees and security also require a check against the Danish rules on financial assistance, which our briefing on financial assistance in Denmark explains.

Powers of Attorney

A company can authorise anyone to sign on its behalf by a power of attorney (fuldmagt). The power of attorney must itself be signed in line with the registered signing rule. Danish law sets no form requirement for it in a commercial transaction.

It needs no notary or witnesses for Danish purposes, and it can be signed electronically. Legal counsel should check two things: that its signatories satisfy the signing rule, and that the power covers the documents being signed. The Land Register is the exception, as set out below.

No Deeds, Seals or Witnesses

Danish law draws no distinction between a simple contract and a deed. A contract binds without consideration, without a company seal and without witnesses. It need not even be in writing, although written form is the norm.

The same applies to guarantees, security agreements and amendments. Under Danish law, a guarantee that an English lawyer would execute as a deed is signed like any other contract. Perfection of security is a separate question, with its own steps for each class of asset.

Electronic signatures are effective under Danish law and under the EU eIDAS Regulation, which applies in Denmark. DocuSign, Adobe Acrobat Sign and Penneo are in everyday use for facility agreements, share transfers, board minutes and powers of attorney. Danish signatories often sign with MitID, the Danish national electronic ID.

Our guide to Danish contract law covers the form rules in more detail.

The Exception for Land and Personal Property Registers

Formal requirements return when a right must be registered. Transfers of and mortgages over Danish real estate, floating charges (virksomhedspant) and other registered security are registered digitally. The registers are the Land Register (tingbogen) and the Personal Property Register (personbogen), both run by the Land Registration Court (Tinglysningsretten).

Documents for registration are signed digitally with MitID (formerly NemID) or its business version, MitID Erhverv. A signatory without MitID, such as a foreign board member or manager, usually acts through a Danish attorney-in-fact using a "wet ink" power of attorney. The power of attorney then follows the Land Registration Court's prescribed form.

When that power of attorney is signed on paper, a practising lawyer or two lay witnesses must confirm the signature, the date and the signatory's identity and capacity. The court also checks the company's signing rule. The parties should build these steps into the closing timetable, because perfection of the security depends on registration.

Notarisation, Apostilles and Legalisation

Danish law does not require notarisation for an ordinary transaction. The need usually comes from abroad, where a registry, court or notary may require a notarised signature from the Danish signatory, with an apostille or legalisation. A power of attorney for use before a foreign notary is a common example.

In Denmark, the district courts (byretter) perform notarial acts. There are no private notaries, and Danish lawyers have no notarial powers. The notary confirms the signatory's identity and signature, not the content of the document.

The signatory attends in person with photo ID and a recent CVR extract showing the signing rule. A company that needs notarisations often can deposit a signature specimen with a district court. The notary then checks signatures against the specimen and the CVR, so the signatory need not attend each time.

The Ministry of Foreign Affairs is the only Danish authority that issues apostilles. A document signed on behalf of a company must first be certified. For powers of attorney and minutes of resolutions, that means a notary.

For other company documents, such as contracts, a chamber of commerce can instead endorse a covering letter from the company. DI Certifikatservice, run by the Confederation of Danish Industry, provides this service to members and non-members. The Ministry then apostilles the endorsement, which must be signed in wet ink, not scanned or printed. DI can also forward the documents to the Ministry or to an embassy. The Ministry indicates five to seven working days for documents sent by post or courier, while documents delivered in person are usually dealt with the same day.

Documents issued digitally by the DBA, such as registration certificates, CVR extracts and articles of association, can receive an electronic apostille, if the receiving authority accepts one. A CVR extract shows the company's status, management and signing rule, and serves the purpose of a certificate of incumbency.

Countries outside the Apostille Convention require legalisation instead. The Ministry legalises the document, and the destination country's embassy or consulate then legalises it again, which adds time.

Some countries waive both formalities for certain Danish public documents under bilateral treaties, Germany among them. Check what the receiving authority requires before ordering either.

Share Transfers

A transfer of shares in a Danish company needs no notary, unlike a transfer of shares in a German company. The parties can sign the transfer agreement electronically. The company records the new owner in its register of shareholders (ejerbog).

The company must also register any owner of 5% or more of the capital or votes in the DBA's public ownership register. Changes to the board and the executive board are filed with the DBA online, usually by Danish counsel.

Closing Checklist

• CVR Extract: dated close to signing, showing the company's status, management and signing rule.

• Articles of Association: the current registered version. The Danish text is the authoritative filed record, so ask for both language versions where an English translation exists.

• Board Resolution: approving the documents, authorising the signatories and, for upstream and cross-stream guarantees or security, recording the corporate benefit.

• Shareholder Resolution: where the articles reserve the transaction for the shareholders.

• Power of Attorney: for any signatory outside the signing rule, signed in line with the rule.

• Register of Shareholders: a copy certified by management, for share transfers and share pledges.

• Land Register Formalities: MitID access, or a power of attorney in the prescribed form, arranged before closing.

• Notarisation, Apostille or Legalisation: only where a foreign authority requires it, with at least a week's lead time, and more where an embassy must legalise.

Further Information

Carsted Rosenberg acts as Danish counsel to international law firms, banks and corporates on cross-border transactions, including the conditions precedent, legal opinions and registrations that a Danish closing requires. For further information, please consult our guides on Danish contract law, Danish banking and finance law and financial assistance in Denmark. For further guidance, please contact Michael Carsted Rosenberg or Dr. Andreas Tamasauskas at Carsted Rosenberg.

This briefing is intended to provide general information on Danish corporate law and transaction practice. It is not intended to provide definitive legal or tax advice. No legal, tax or business decisions should be based solely on its content. The briefing does not necessarily deal with every important topic and is not designed to provide legal or other advice. It shall not be used as a substitute for legal advice and none may be inferred. It is only intended for general information on matters of interest. While we endeavour to represent the information as accurately and correctly as possible, we cannot accept any responsibility for any errors or omissions.