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In Denmark it depends on the legal structure of your business. Personal debts are much harder to discharge in bankruptcy than in the U.S., and cause much longer
by _delirium 12y ago
In Denmark it depends on the legal structure of your business. Personal debts are much harder to discharge in bankruptcy than in the U.S., and cause much longer-lasting trouble. But it's fairly easy to set up a limited-liability company, and in that case your personal finances are insulated from what happens to the business, like in the U.S. For example if an ApS you were owner of went bankrupt, it wouldn't impact your personal credit, and you wouldn't be personally responsible for the debt. As a result it's quite common for even low-turnover one-person freelance businesses to be incorporated as an ApS rather than performed as a sole proprietor (roughly like the use of LLCs in the United States).
- ThomPete 12y agoAt the same time way more startups funding in Denmark are based on loans not investments and sometimes you have to personally vouch for that :)
- danielweber 12y agoI was surprised to learn that, even with the restrictions on bankruptcy declaration about 10 years ago, the US still makes it very very easy to declare bankruptcy, as compared with other first-world countries.
- bowlofpetunias 12y agoSame in the Netherlands. However, if the bankruptcy of the company is found to be the result of blatant mismanagement, the creditors can go after the owners personal possessions. There is no stigma attached to an entrepreneur who's company goes bankrupt, but the personal bankruptcy is a sign of failure.
- mseebach 12y agoOne thing is the formalities of a bankruptcy, which like most business formalities in Denmark are pretty simple to deal with - another is the social stigma. It's anecdotal, but I'd say that such a stigma definitely exists in Denmark.