Types of Companies in Norway
Types of Companies in NorwayUpdated on Tuesday 23rd April 2019
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The Norwegian State offers investors a wide variety of company structures in order to respond to their different business needs. Foreign investors are not required to reside in Norway in order to set up a business here, following the principle of full freedom of establishment.
Our team of lawyers in Norway can assist investors with legal advice on the requirements of setting up a company. Depending on the nationality of the businessman, special permits may be required as, for example, persons outside the European Economic Area (EEA) and European Union (EU) will need a special residence permit.
The types of companies in Norway have various particularities which refer to a wide range of aspects concerning the manner in which a specific legal entity has to be organized under the local legislation. Our team of Norwegian lawyers can provide legal assistance on the requirements imposed for all the local entities, on matters such as:
- • the capital invested - the minimum share capital requirements depend on the business structure that was chosen for registration (in the case of limited liability companies, it is set up at NOK 30,000) ;
- • the domain in which the business runs - depending on this, the company will have to obtain specific business licenses;
- • the board members - various types of companies have to establish a Board of Directors which, in a public limited company, has to be comprised of minimum three persons ;
- • the degree of liability - in the case of a sole trader, the owner of the company is fully liable for the company’s debts, while in a limited liability company, the liability of the shareholders is limited to the amount of the participation at the company’s capital.
The following video offers a short presentation on the business forms available in Norway:
Main types of companies presented by our lawyers in Norway
The most popular legal entities in Norway are the public (Allmennaksjeselskap – ASA) and private (Aksjeselskap - AS) limited company. There is a minimum capital of NOK 30,000 needed for the small or family-owned companies and of NOK 1 million for the ASA.
Although they differ from each other in some aspects concerning the company’s management, both the ASA and the AS must follow the same regulations regarding the next aspects: the labor requirements, the taxes and fees that have to be paid, the types of shares, the control of the company, its promoters and shareholders and the board of directors.
In the case of AS and ASA, the investors (who have the quality of shareholders) are liable for the company’s debts only in the amount of the capital they have invested in these business forms. The AS and ASA can be founded by at least one person and the registration steps have to be started within three months since the investors have signed the memorandum of association. These business forms will be recognized as companies only after they have been registered with the local authorities.
It is also necessary to appoint a board of directors, which can have only two members in the case of a company set up with a capital less than NOK 3,000,000 and three members for a capital above this sum. Our team of lawyers in Norway can offer more details on the share capital of a local legal entity.
Foreign companies which intend to extend or initiate an activity in Norway can register the Norwegian branch of the company as NUF (Norskregistrert utenlandsk foretak). A branch office allows the parent company to start a business activity in this country in a simpler manner, but foreign entities may also register a subsidiary here.
Partnerships in Norway
Another business form available in Norway is the Ansvarlig selskap (ANS) which represents the general partnership. The ANS can be set up by any person, since there is no requirement for an initial investment capital. A partnership agreement must be written and signed and registered with the Norwegian Register (Foretaksregisteret). The ANS is the most appropriate legal form for medium or small enterprises which do not function in the most risky sectors of the business market.
ANS, which in translation means liable company, is, as the name suggests, a company in which each individual owner bears the legal responsibility for any debt of the company, not only for the invested capital. Another form of partnership is the Selskap med delt ansvar (DA), which refers to the general partnership with shared liability. For the DA there must be two or more participants in the company, both liable for the company’s debts. In case you are interested in opening a partnership in this country, our Norwegian lawyers can give you more details.
Other types of partnerships recognized in Norway are the limited partnership (KS, which must be founded by at least two partners, one having limited liability, and the other having unlimited liability) and the internal partnership (indre selskap) – this type of partnership is set up by one general partner, who has unlimited liability for the partnership’s debts, and a silent partner, who can have limited or unlimited liability. It is also important to know that partnerships in Norway can be established by both natural persons and legal entities.
Other types of legal entities in Norway
The BA stands for a company with limited liability, similar to the AS. There is however a notable difference, regarding the way the profit is distributed. The regulations concerning the formation of a BA are stated in the Norwegian Act of Parliament 1997 ss 1-1(3).3.
Enkeltpersonforetak (sole trader company) stands for a legal form of enterprise in which there is only one owner. Legally speaking, the owner and the enterprise are the same. The owner must be aware of the fact that he or she holds the entire financial responsibility for all obligations and debts.
What are the requirements for starting a Norwegian sole trader?
The sole trader in Norway can be easily registered by any natural person, provided that several conditions are met. First and foremost, the applicant must be at least 18 years old in order to have the legal right of starting a business. Then, it is necessary to develop a commercial activity and have a Norwegian business address.
A particularity of the Norwegian legislation is given by the fact the sole trader can be registered not only by Norwegian citizens, but also by foreigners (other European countries offer this option as well, but in most of the jurisdictions this business form can only be set up by locals).
In this situation, the foreigner who want to start a business activity in Norway through a sole trader has to obtain a D number, which is a national identification number used for foreigners for tax matters. This will allow the opportunity to open a bank account at a local bank, but also to be registered with the country’s national health system.
Although foreigners do not have any restrictions for starting a business activity in this country, prior to arriving here for business purposes the investors will need to obtain certain documents. One of the documents that is required when planning to work in this country is the residence permit – a document that is binding for all the citizens who are nationals from countries outside EU or the EEA.
Legal consultancy offered by our law firm in Norway
With such a diverse plethora of legal forms, it is advisable to approach a local Norwegian law firm for counselling, support and further relevant information. Our local attorneys can offer all needed support regarding these matters and can assist businessmen in setting up one of the above mentioned legal forms. Our attorneys may also provide information on how to set up an offshore company in Norway. Please contact our team of lawyers for more information or for a personalized offer.