Privat limited liability company – AS

A private limited liability company is its own legal person and the liability of the owners is limited to the share capital invested in the company. The Limited Liability Companies Act of 1997 sets out the rules and regulation for a private limited liability company.

The amount of share capital must be at least NOK 30.000,-. The company can use the share capital for investments but must ensure that it is solvent and has adequate equity. Company costs should therefore be covered from additional funds.

The supreme authority of the company is the general assembly. The general assembly must be held every year and all shareholders has the right to attend and vote at the general assembly. It is the general assembly that elects the boards of directors. All companies must have a board of directors and the board is responsible for the management and running of the company. The board of directors must consist of at least one person. At least 50 % of the board members must reside in Norway or another EEA country. The Board of Directors appoints the General Manager.

As an owner of a private liability company you can also be an employee with all the social benefits and rights that offers.

Who can be founders of a limited liability company?

• Natural and legal persons
• Natural persons must be aged 18. The same age limit applies to other roles in the company.
• The natural person must have a Norwegian national Id Number or D-number. If not, a D-number has to be applied for when the papers for registering the company in the Register of Business Enterprises are filed. As a founder of a Norwegian company, or a roleholder in a legal entity, you will have the right to acquire a D-number.
• The company must have a Norwegian business address. Business address must be the physical address, not a postbox adress.

Public limited liability company – ASA

To establish a public private limited liability company in Norway the share capital has to be NOK 1.000.000,-. A private liability company is regulated by the Public Limited Liability Companies Act of 1997.

Norwegian Branch of a foreign Company – NUF

A foreign company can establish a subordinated branch in Norway. The foreign company will be responsible for the operations in the Norwegian branch. The board of directors in the foreign company is responsible for managing the branch in Norway. If desired, a board can be established in the Norwegian branch and a general manager appointed.

The branch in Norway is regulated by Norwegian laws. There is no specific law for NUFs but much of the same rules apply to NUF as to limited liability companies. To engage in commercial activities in Norway the Norwegian branch must be registered in the Register of Business Enterprises.

Since the NUF is a branch of the foreign company there is no equity requirements for the establishment of a NUF, and the foreign company is also liable for all creditors of the branch office.

A NUF must comply with the Norwegian VAT rules the same way as Norwegian companies. Whether a NUF must pay tax to Norway must evaluated in each case specifically.

The NUF must have a designated contact person. This contact person does not have to be a Norwegian resident, but must have a Norwegian identification number or d-number. A d-number can be obtained by applying for it together with the application for a role in the NUF to the Register of Business Enterprises.
All foreign employees working in Norway must be registered in Norway. Employees in the NUF will generally have the same social rights as other employees in Norway.

Essential features:

• The responsibility for the operation in Norway is subordinated to the foreign company
• No requirements for the type of company that can have a branch in Norway
• No equity requirements
• The foreign company is liable for all creditor of the NUF
• Not investor friendly

Sole proprietorship – ENK

A sole proprietorship requires you to have a Norwegian address, be over 18 years old, alternatively 15 if you have the approval from your guardian and the County governor.

If you are not a citizen of Norway or an EU / EEA country, you will ned to have a resident permit that allows you to work in Norway to be able to register a sole proprietorship.

As the company is owned by a natural person and run on that person’s own account and risk, this entity form gives you unlimited personal liability.

You can’t be employed at you own firm, however you can have other employees. The business profit will be regarded taxable income and the owner can withdraw as much of the profit as he/she likes.

The full name of the owner has to be included in the company name.

Essential features:

• Easy to start up and low start-up costs
• No equity requirements
• Few formal requirements
• Fully controlled by the owner
• Unlimited personal liability
• Not investor friendly

Partnerships – ANS / DA

All business partnerships are regulated by the Partnership Act of 1985. A general partnership is a partnership where two or more partners have jointly or severally personal unlimited liability for the obligations of the company. A partnership is a separate legal entity with the ability to sue and be sued.

There are two types of common partnerships in Norway; 1) partnerships with joint and several liability (ANS) and 2) partnerships with shared liability (DA). The difference between them lays in the name. In a joint and several liability partnerships a creditor can collect the full debt from one of the partner, while in a shared liability partnership each partner is only liable up to its share of the liability.

All general partnerships must have a written partnership agreement signed by all the partners. For a partnership with shared liability the share for each partner must be written in the partnership agreement.

The responsibility for debt accumulated before leaving the partnership will apply also after leaving the partnership unless discharged from liability from the creditor. A partner can also be held liable for obligations established before the partner entered into the partnership.

Essential features:

• No equity requirements
• Easy to start a partnership
• Personal liability; either unlimited or shared / proportional
• Not investor friendly

Internal partnership – IS

An internal partnership (also called silent partnership) does not appear to be a partnership or act as a partnership towards the public. The silent or sleeping partner will have no direct liability towards third party claims. The liability in the internal partnership will usually be defined by the partnership agreement. The silent partner will often have contributed capital to the partnership entitling the silent partner to a defined portion of profit and losses.

An internal partnership is recognised as a legal entity and regulated by the Partnership Act of 1985.

Limited partnership – KS

A limited partnership is a partnership were at least one of the partners have an unlimited personal liability for the company’s responsibilities and at least one or more of the other partners has a limited personal liability which is set to a specific amount. This company appears to the public as a partnership. The letters KS must be included in the company name.

A limited partnership is regulated by the Partnership Act of 1985.

The register of business enterprises

All legal entities must be registered in the Register of Legal Entities (Enhetsregisteret) in Norway. This is the register that allocates organization numbers.

The Register of Business Enterprises (Foretaksregisteret) registers Norwegian companies and branches of foreign companies that has commercial activity in Norway or on the Norwegian continental shelf. Limited liability companies (AS / ASA), branches of foreign companies (NUF) and partnerships (ANS / DA) are obliged to register. Sole proprietorships are all entitled to registrate, and mandatory if trading ready-made-goods or having more than five employees.