Sole Proprietorship, ApS or A/S: A Comparison When Selling

Have you read our separate walkthroughs of how a sale plays out for a sole proprietorship, an ApS and an A/S? This article gives you the combined overview, so you can quickly see where your own business fits.

The basics: legal entity or not?

The most important dividing line runs between the sole proprietorship on one side and the ApS/A/S on the other. A sole proprietorship isn't a separate legal entity — in the eyes of the law, you and the business are the same. An ApS and an A/S, by contrast, are both separate legal entities, distinct from you as owner. That difference is the reason almost all the other differences in this comparison exist.

• Separate legal entity: Sole proprietorship — no. ApS — yes. A/S — yes.
• Minimum capital: Sole proprietorship — no requirement. ApS — DKK 20,000. A/S — DKK 400,000.
• Personal liability: Sole proprietorship — full and personal. ApS and A/S — generally limited to the contributed capital.
• Can be sold as a share purchase (selling ownership stakes): Sole proprietorship — no. ApS and A/S — yes.
• Can be sold as an asset purchase: All three — yes (for the sole proprietorship, it's the only option).
• Mandatory board: Sole proprietorship and ApS — no. A/S — yes, at least 3 members.
• Business registration number automatically transfers on sale: Sole proprietorship — no. ApS and A/S — yes, in a share purchase.
• Can offer shares publicly / be listed: Only A/S.

What does this mean for the complexity of a sale?

Generally: the more formalized the legal form, the more formalized the sale process becomes too. A sole proprietorship is the fastest to set up, but the most administratively demanding to sell, because nothing comes along automatically — neither the CVR number nor contracts. An ApS offers the best balance between simplicity and flexibility for most small and medium-sized business sales. An A/S is the most formalized, typically meaning a longer process with more decision layers — but also a structure often preferred by larger, professional buyers.

What does it mean for tax?

If you sell a sole proprietorship, the profit is taxed as personal income — whether it's goodwill, recaptured depreciation on equipment, or something else. If you sell shares in an ApS or A/S directly, the gain is instead taxed under the Share Gains Tax Act — see our walkthrough of when you pay 42% tax on shares. If you instead choose to sell assets out of an ApS or A/S, the same principles around depreciation balance and goodwill taxation apply as for a sole proprietorship — the difference mainly arises when it's the ownership stakes themselves that change hands.

What does it mean for goodwill?

Regardless of legal form, goodwill is a central part of the price — but it's treated differently depending on the sale structure. In an asset purchase — whether from a sole proprietorship or a company — goodwill is taxed separately under depreciation rules. In a share purchase, goodwill instead forms part of the overall share gain.

Should you change legal form before listing for sale?

It can make good sense if your current form unnecessarily limits your options — for example by converting a sole proprietorship into an ApS to open up a share purchase, or by establishing a holding structure well ahead of the sale. See our full walkthrough of the relevant tax models for generational transfers and sales. If you're considering a change, it should happen well in advance — ideally as part of your general sale preparation, not once a buyer is already in dialogue with you.

In short: when is each form typically most relevant?

• Sole proprietorship: Most relevant for smaller businesses where low setup cost has mattered more than future sale flexibility — but often worth reconsidering once a sale is genuinely on the horizon.
• ApS: The most common form for small and medium-sized businesses seeking limited liability combined with a relatively simple structure.
• A/S: Most relevant for larger businesses, businesses with multiple outside investors, or businesses that, in the longer term, consider a broader ownership group or a stock listing.

Frequently asked questions

Is it always an advantage to have a company (ApS/A/S) rather than a sole proprietorship if I plan to sell?

For most people who seriously consider a future sale, a company offers more flexibility — but the day-to-day operations, administration and capital requirements also need to make sense for you today, not just for a future sale.

Can I convert my sole proprietorship into an ApS right before a sale?

It's possible, but should happen well in advance and with professional advice — a conversion has its own tax and practical conditions, and shouldn't be attempted at the last minute in an ongoing sale process.

Which legal form is most expensive to sell?

Typically an A/S, due to the formal requirements around the board and general meetings — but this often also reflects that A/S companies are, in practice, bigger and more complex than the other forms.

Unsure how your business's legal form affects an upcoming sale? Book a no-obligation call, and we'll figure out what makes the most sense for your specific situation.