Private Limited (ehf.)

Electronic registration of private limited companies

The Director of Internal Revenue has now introduced a new system that allows people to form private limited companies or submit changes to private limited companies electronically. The new electronic way simplifies and speeds up the registration process considerably and instead of the registration of a private limited company or changes in registration requirements take 10-12 business days, this registration now takes 4-5 business days.

An electronic business register generates all the initial data from the information that the registrar enters into the application, this innovation prevents discrepancies in the initial data and increases the quality of all information.

In order to start the electronic registration of a private limited company, the person in question must register for electronic identification on the service pages of rsk.is. The electronic registration process is in general pages and under the corporate register. If a registrant is to be a legal entity, the person must register on the website of the company where he is a proprietor or board member and start registering through that company’s service page. Please note that a legal entity can only be a private limited company but more corporate forms will be added in the near future.

In order to submit a change to a private limited company, the person must always be logged into the service page of the company for which changes are to be submitted.

Claims for payment of registration fees and notification fees are now sent directly to the registrar’s home bank and payment registration fees are only carried out in this way, the registrant no longer has to transfer the registration fee to the Director of Internal Revenue. If a registrar does not have a home bank, you can select another payer at the last stages of registration.

Registration of private limited companies on paper

Private companies are listed in the Register of Corporate Tax Directors. Initial data must be submitted to business registries and registration fees paid. Cash, debit card or deposit can be paid (see tariff).

The turnaround time for filing a private limited liability company is generally about ten to twelve business days from the date of submission of data to the corporate register, provided it is satisfactory and payment (or payment receipt) is included with the data. You can send a scanned copy of basic data to the email address fortaekjaskra@rsk.is It is not necessary to submit original copies of the data.

The minimum share capital shall be ISK 500,000. All share capital shall be paid upon the establishment of the company. If the share capital is paid for other than cash, confirmation must be obtained from a lawyer or a certified public accountant that the property in question exists. No shares in a private limited company are issued, but shares or share certificates are not mentioned.

The social security number will be created when registering a company. The ÍSAT number (Icelandic Industry Classification) is registered with an organization according to information from the founders about the company’s main activities.

One founder

When one party establishes a private limited company, it is necessary to submit a notification form, articles of association, charter, founding and notification of real owners.

Here you can find a sample of the necessary initial data in Word. You can customize and print and sign.

  • Take care to ensure:
  • The notification form is filled in according to the basic data.
  • Handwriting samples are correct.
  • All signatures are correct.

Two or more founders

When two or more parties form a private limited company, it is necessary to submit a notification form, articles of association, a memorandum of association, a founding meeting and a notification of the actual owners.

Here you can find a sample of the necessary initial data in Word. You can customize and customize, print and sign.

Take care to ensure:

  • The notification form is filled in according to the basic data.
  • Handwriting samples are correct.
  • All signatures are correct.

Individual operations transferred to a private limited company

An individual’s business operations may be transferred to a private limited company without the transfer resulting in taxable income for the owner or the company itself.

A business person must establish a private limited company that accepts all assets and liabilities of the business operator. There must be certain conditions:

When a private company is transferred to a private limited company, all the same data must be submitted as when a private limited company is established by one party. In addition, the balance sheet of the individual business must be included as of December 31 and must not be older than four months. Therefore, individual operations need to be transferred to ehf. no later than April 30 of each year and initial data must be submitted to business registers no later than June 30 of the same year.

  • A private limited company will not be established without the minimum capital provided, which shall include the value of equity transferred from the individual operations according to its balance sheet, cf. further below.
  • The owner of the private enterprise shall be subject to unlimited tax liability in Iceland, cf. Article 1 Act.
  • The company which takes over the individual business shall be registered in this country and bear unlimited tax liability, cf. Article 2 Act.
  • The owner of the individual business shall receive only in the transfer part of the company as a consideration for the transferred assets and liabilities of the individual business.
  • In addition to the information required for notification to the Companies Register of the Company’s establishment pursuant to Act no. 138/1994 on Private Limited Companies, shall be attached to the Balance Sheet of the Individual Operations, which shall also be the initial balance of the Private Limited Company. The balance sheet shall be effective as of 31 December and may not be older than four months at the time of the establishment of the private limited company and shall be audited by the auditor and signed without notice. At the same time, the auditor shall confirm that the benefits of the company have not been reduced by the owner’s audit from the time the transfer is to be taken into account until the establishment of the company. For tax purposes, the private limited company is considered to take over operations and balance sheet from the balance sheet date.

For tax purposes, the private limited company is considered to take over operations and balance sheet from the date of the balance sheet of the individual business. Upon transfer, the company shall assume all tax liability and rights of the operation, including the remaining operating losses from previous years, provided that the conditions of item 8 are met. Article 31 met. However, the person engaged in the operation is unlimitedly responsible for the payment of the official fees relating to the operation before his transfer. Assets and liabilities must be transferred at book value. If the assets of the individual business have been revalued at the establishment of the private limited company in the manner satisfactory in the opinion of the Register of Limited Companies, cf. II. section of the Act on Private Limited Companies and the revaluation entered in accordance with the Act on Annual Accounts, the revaluation increase shall not be taxed in the individual business or the company. The initial price of these assets and the remaining expiry price are considered despite their revaluation, the same with the private limited company as it was in the individual business. The initial balance sheet, together with a statement on the transfer of individual business to a private limited company, shall also be accompanied by the company’s first tax return.

The initial value of the share price of the private limited company is determined equally in the book value of the individual operations, taking into account additional cash. If an individual sells an item which he received upon transfer, their initial price in determining the profit from sale is considered to be taxable book equity according to the balance sheet of the individual business.