A Danish general partnership (I/S) is a form of cooperation in which two or more individuals or companies run a business together. Unlike capital companies, the partners are personally, unlimitedly and usually jointly liable for the partnership's obligations. In return, the form is flexible, relatively simple and well suited to close partnerships where everyone is active in operations.
Precisely because liability is so far-reaching, a well-thought-out partnership agreement and clear arrangements on roles, finances and decisions are essential.
Capital requirements and liability
There is no statutory minimum capital for an I/S:
- each partner can contribute capital, labour, assets — or a combination,
- capital contributions and ownership shares are set out in the partnership agreement.
Liability is:
- personal and unlimited for each partner,
- generally joint and several, meaning a creditor can claim the entire debt from a single partner, who must then seek recourse from the others.
In our advisory work we help you to:
- align the relationship between contributions, work effort and ownership share,
- describe and balance internal responsibility between the partners,
- clarify the risks each individual takes on.
Formalities for incorporating an I/S
The law does not require a written contract, but in practice a partnership agreement is essential. It should at minimum regulate:
- partners, ownership shares and contributions,
- allocation of profit and loss,
- distribution of work and responsibility,
- signing rule and decision-making (who can decide what — and by what majority?),
- withdrawal, illness, death, bankruptcy, divorce etc.,
- dissolution of the partnership and distribution of assets and debt.
In addition, the I/S must:
- be registered with the Danish Business Authority,
- potentially be registered for VAT and as an employer, depending on activity.
We draft and tailor the partnership agreement so it both meets the formal requirements and handles the realistic scenarios that can arise between the parties — including those that are hardest to talk about.
Management, signing rights and decisions
As a starting point, all partners have:
- the right to participate in management,
- the right to information about the business's affairs.
But to achieve effective day-to-day operations, it is often necessary to agree:
- who is responsible for which areas (finance, sales, operations etc.),
- who can sign for the business externally (sign agreements, conclude contracts),
- which decisions require unanimity, and which can be made by a simple majority.
We help you to:
- formulate a clear and practical management and decision-making structure,
- align the internal agreements with the signing rule registered with the Danish Business Authority,
- set up a simple but effective meeting routine with minutes, so all decisions are documented.
Economics, tax and bookkeeping
An I/S is in principle tax transparent:
- the partnership itself is not taxed as a separate company,
- each partner is taxed on their share of the result.
This requires:
- clear, ongoing bookkeeping,
- a clear statement of each partner's share of the result,
- agreement on internal liability for losses and unforeseen obligations.
We are happy to work with an auditor on:
- choice of appropriate tax scheme for each partner,
- setting up an accounting structure that provides both overview and documentation.
The human and commercial partnership
An I/S rests on trust and shared ambitions — but also on clear agreements. Many conflicts can be avoided if you:
- talk early about the future, exit and "what if" scenarios,
- put in writing expectations on work effort, salary, dividends and time off,
- agree how disagreement is to be handled before it arises.
Our assistance therefore is not only about law, but also about facilitating the necessary dialogue between the partners, so you get a strong and durable foundation for your shared business.