Benefit rights based on end of self-employment
As a general rule, you must close down your business to be eligible for benefits. Below you can read more about the various ways to close down your business.
Removing your business from the Central Business Register (CVR-register)
Your business is registered as “struck off” in the Central Business Register (CVR) when the tax liabilities have been transferred or satisfied. After the transfer or satisfaction of all tax liabilities, you can get a certificate of termination from the Danish Tax Agency (Skattestyrelsen)/the Danish Customs and Tax Administration (SKAT). The date specified on the certificate is the date on which your business is closed down.
We need the certificate of termination as documentation for the closing down of your business.
Bankruptcy or forced sale
If your business goes bankrupt or is sold by order of the court, it can be considered closed down.
In case of bankruptcy, the date of termination is the date the bankruptcy court issues a bankruptcy order, but at the latest on the weekday following the receipt by the bankruptcy court of the petition for bankruptcy. The bankruptcy order is generally published in the Official Gazette (Statstidende), but if it is not available there, you must send the bankruptcy order to us.
In case of a forced sale, you need a transcript from the bailiff’s court on the sale of your business. As a general rule, you must cancel your VAT and company registration, and it is a requirement that your business is sold to others than your spouse, cohabitant or minor children.
Leasing your business
If you lease your business, we cannot consider you as being self-employed unless it is impossible for both parties to terminate the lease agreement for a period of 3 years. However, special rules apply in the hotel and restaurant industry. Please send us a copy of the agreement with the lessee that specifies the length of the termination notice. We also need a letter from you confirming that you no longer work or participate in the business.
You are permitted to continue to be registered for VAT and in the company register, but you must no longer have a self-employed status with other authorities.
Solemn declaration
If for some reason you’re unable to cancel your registration with the Central Business Register and therefore cannot be issued with a certificate of termination, you can send us a solemn declaration that you have closed down your business.
Please note that you will not be eligible for benefits for the first 2 months after we have received your solemn declaration. If you submit a certificate of termination showing that the registration of your business with the Central Business Register has been cancelled before the end of the 2-month period, you will be eligible for benefits the day after the cancellation of the registration. However, a minimum waiting period of 3 weeks applies from the day we receive your solemn declaration.
Please note that you are required to provide documentation within 6 months showing that your business has been closed down. If you’re unable to do so, you will not receive benefits again until the day you submit a certificate of termination.
The hours you spent closing down your business must be deducted from your benefits.
Closing down your business if organised in corporate form
If you have run your business as a corporation, you can be considered to have stopped being self-employed once it has been registered with the Danish Business Authority that you are no longer the owner of the company.
If you leave a company with several owners, you must send us a registration certificate issued by the Danish Customs and Tax Administration (SKAT) showing that you are no longer a co-owner.
If you are still a co-owner, you can be considered as having stopped being self-employed when you submit a registration certificate issued by the Danish Customs and Tax Administration (SKAT) on change of ownership, showing that you no longer hold a controlling interest in the company. You are deemed to have a controlling interest when either you or your spouse alone or together with immediate family own at least 50% of the company’s capital or control the majority of the company’s voting stock. The change of ownership must be registered with the Danish Business Authority.
You may keep a holding company and still be considered as having stopped being self-employed if you can show that:
- there are no longer any commercial activities in your business. All equipment, machinery, stock etc. have been sold, e.g. by way of cancellation of VAT registration
- you have applied the Danish Business Authorities for registration of a change of the company’s purpose clause to asset management
If your ownership interest falls below 50%
If you sell your shares, and you and your immediate family together own less than 50% of the aggregate share capital, you will no longer have a controlling interest in the company. Consequently, your status as a sole trader changes to an employee from the date of the change.
If you apply for benefits, it means that:
- you are not required to sell your shares
- if you leave your job voluntarily or lose your job and it’s your fault, you will not receive benefits until after a suspension period of 111 hours.
- if you continue to work in the business, you must be employed on normal pay and employment terms in order for the earned income to count towards your benefit rights.
You will be considered as having stopped being self-employed when we receive a solemn declaration from you and your spouse confirming that you have left your spouse’s business.
This applies to you if you have been an assisting spouse without being a co-owner and without having a wage or salary contract with your spouse under the Danish Tax at Source Act (kildeskatteloven). This also applies if you are deemed to be a co-liable spouse as defined by the Danish Customs and Tax Administration (SKAT).
If you start working in the business again, you cannot leave the business on a solemn declaration and claim benefits again until at least two years after you rejoined the business.
If you have also been a co-owner of the business, you will be deemed to have stopped being self-employed when it has been registered with the Danish Business Authority that you’re no longer a co-owner.
If you have been an assisting spouse with a wage or salary contract, you are an employee. In that case, you will not be eligible for benefits for the first 3 weeks after you stop working as you will be subject to a waiting period.
Dissolution of the company at the request of the Danish Business Authority
If the company is unable to pay its creditors, or if the company has failed to submit its annual reports, or if an auditor or executive officer has left the company without a new auditor or executive officer being appointed, your company will be dissolved in accordance with the rules of the Danish Bankruptcy Act (konkursloven).
Once an application to dissolve a company has been submitted to the Danish Business Authority, it is impossible to change the company’s purpose clause. It is therefore very important that you make sure to change the company's purpose clause to asset management before submitting the application for dissolution of the company. Otherwise you’ll not be deemed to have stopped being self-employed until the dissolution process is completed, and that may take a very long time.
If you stop being self-employed as your main occupation, you will not be eligible to receive benefits until after expiry of a so-called waiting period. The waiting period always starts from the day after your self-employment ends.
If you got your right to benefits after stopping being self-employed, you can not start up a new business until after expiry of a period of 6 months. This does not apply if you stop being self-employed after having had a secondary occupation or going bankrupt.
Otherwise you’ll be barred from receiving benefits until the 6-month period has elapsed.
The 6-month period is called a job search period and is applicable whether or not you close down your new business.