A majority shareholder and a company are two independent entities that can enter into agreements with each other. Typically, there is an employment agreement that describes the salary and terms of the main shareholder's employment with the company, but the agreements can also deal with the transfer of assets such as real estate or cars.

Writing is wise, but not a requirement

Previously, company law required all agreements between a majority shareholder and their company to be in writing. However, this has changed. Today, oral agreements are in principle just as valid as written agreements. Company law only requires that the agreements can be documented (section 127(2)).

It is obvious that written agreements are significantly easier to document than oral agreements and that this increases the possibility of proving the content of an agreement. In other words, evidence is weakened if there is a lack of writing.

Arm's length terms are important for major shareholders

Especially in tax law, we often encounter challenges when there are no written agreements. All funds and assets that are transferred from a company to a majority shareholder must be taxed and all agreements must therefore be made on so-called 'arm's length' terms.

This means that the agreements must be made on the same terms and at the same prices as if they were made between independent parties. Purchases and sales of assets must be valued at market price. If the agreement is not at arm's length, the tax authorities can override the agreement.

The burden of proof then falls back on the main shareholder and the company, which can result in taxation that is higher than it should be.

Save valuation documentation

Agreements such as property transfers require written agreements in order to register ownership correctly, but we recommend that all transfers of assets between a main shareholder and a company have written agreements.

Remember to also save the documentation for the valuation of the asset for each transfer.

Loan agreement

If main shareholders lend money to the company, it is recommended that a written loan document is prepared if it is an actual loan and an overall framework agreement describing the loan conditions for an ongoing interim settlement.

Please note that a principal shareholder cannot borrow money from his company without tax consequences. Such loans are taxed to the main shareholder either as salary or dividends.

Solid procedures and secure handling of sensitive data are more important than ever.

Increasingly, data processors and service providers are being asked to provide independent evidence that they are in control of information security. The topic has moved into the boardroom, with authorities continuously passing new legislation and issuing fines for non-compliance.

Here are some of the benefits your business can gain from an IT auditor's report.

External:

1. Your customers get independent proof that you take good care of their data.

2. You signal that you are a professional company with a focus on quality and safety.

3. The declaration is based on international standards and also applies to your foreign operations.

4. With an IT auditor's statement, you can stand out from the competition in tenders and marketing.

Internal:

5. Management and employees gain a sharper focus and understanding of IT information security and personal data

6. Regular renewal of the declaration ensures that there is a focus on up-to-date processes.

7. you get an overview of weaknesses and derived improvement opportunities.

8. the IT audit is a great opportunity to get professional, expert advice on your information security.

Certified public accountants can provide declarations and attestations that provide a degree of assurance on the content and quality of the product.

The declarations can be made about e.g. company law matters, including:

• Foundation
• Increase and decrease of capital
• Merger and demerger
• Review of annual and interim financial statements.

Auditor statements for e.g. mergers, loans and grants

Companies facing changes in capital and ownership in the form of a merger or demerger often need an auditor's opinion that the information is fairly presented with a certain degree of certainty.

They can also be statements for companies that are responsible for taking out loans or receiving grants and have therefore signed a specific audit agreement.

IT auditor statements

An IT auditor's statement shows customers, partners and stakeholders that a company has described all IT procedures and processes in a way that reflects reality. In a way, the company gets paper proof that it is doing what it has written that it will do.

IT auditors also look at whether the company complies with any requirements, regulations and guidelines in the area in question.

Review of financial statements

Smaller companies that are not subject to a statutory audit can have a review - a so-called review - of annual and interim financial statements. In this case, the auditor only examines the financial statements through inquiries and analysis and issues a statement based on this.

In a full audit, the auditor checks the entire financial statements.

In tough times, there are a number of levers you can pull right now to strengthen your company's cash flow. Here are 7 actions.

1. The budgets

Bring them up to date. This creates an overview and helps you take the necessary actions.

2. Banks

Talk to your advisor. Can you reschedule loans, extend credit limits, increase overdrafts or defer payments?

3. Tax and VAT

Explore installment options for your company's tax and VAT payments.

4. Invoicing

Take stock of outstanding customer accounts and invoice at short intervals.

5. Creditor agreements

Contact creditors and suppliers to agree new payment deadlines or terms.

6. Fixed costs

Can you change or cancel subscriptions, fixed agreements, etc.

7. investments

Put internal projects on hold and postpone investments.