What are the effects of registration?

Effect of publicity

Any information entered in the Trade Register and duly published under the Trader Register Act must be deemed to have become known to a third party (Section 26 of the Trade Register Act). In other words, when a circumstance has been entered in the register and has been duly published, it is considered to have become public knowledge. This is called the positive effect of publicity of a register entry.

The effect of publicity is of importance to the operation of a company. It can use the details contained in the Trade Register to check the background of other companies or to get more details of a contracting party. Third parties can basically rely on that for example persons registered as having the right to represent the company actually have that right.

If less than 16 days have passed since the publication, the published circumstance can however not be referred to against someone who proves that he or she cannot have had knowledge of it. Before publication, a circumstance that has or should have been entered in the Trade Register cannot be referred to against anyone else than a person who is proven to have had knowledge of it. This is called the negative effect of publicity of a register entry.

A notification submitted to the Trade Register is registered and the registration is published the same day.

Constitutive effect

In some cases specified by law, registration can also have a constitutive effect, i.e. a particular circumstance takes effect once it has been registered. For example limited liability companies or co-operatives come into being when they are registered.

Other cases where registration has a constitutive effect in limited liability companies:

A change made to the Articles of Association takes effect once it has been registered (for example the accounting period, company name, or municipality where the company is managed, i.e. domicile).
An increase or reduction of the share capital takes effect upon registration.
Changes made to the nominal value or accounting par value take effect upon registration.

Protect your company name

Registration gives nationwide protection to your company name.