Formation and registration of companies in Norwegian law – limited companies and partnerships

The establishment of a company under Norwegian law follows formalized procedures that vary between different types of companies. For limited companies and public limited companies, the procedure is practically conducted electronically, simplifying an otherwise formal process. The practical implementation of company establishment has been significantly modernized, while the legal requirements for the establishment process itself are maintained.

The establishment procedure for limited companies and public limited companies

Limited companies and public limited companies are established according to the rules in chapter 2 of their respective laws. The main purposes of these rules are twofold:

1. To provide correct information to potential shareholders

2. To ensure that the share capital is truly paid in and benefits the company

The establishment procedure is formally completed by creating an establishment document that includes:

• The company's articles of association (cf. the Limited Liability Companies Act/Public Limited Companies Act § 2-2)

• Other provisions as mentioned in the Limited Liability Companies Act/Public Limited Companies Act § 2-3

Electronic establishment through Altinn

In practice, company establishment and registration are conducted electronically through the Altinn platform:

• The founder enters information into the electronic system

• Altinn automatically generates an establishment document and articles of association

• After establishment, the founder receives a notification in their Altinn inbox

• The founder can use a link in the notification to begin company registration

• The information from the establishment document is then automatically entered into the "Coordinated Register Notification"

Signing the establishment document

The founders must date and sign the establishment document and any other establishment documentation (cf. the Limited Liability Companies Act/Public Limited Companies Act § 2-9 first sentence). Once all founders have signed the establishment documentation, the shares are considered subscribed and the company is established (cf. the Limited Liability Companies Act/Public Limited Companies Act § 2-9 second sentence).

Special rules on contribution in-kind

There is no requirement under the Limited Liability Companies Act for share capital to consist solely of cash contributions. The law also allows for contributions in-kind and other assets, provided the assets can be capitalized under the Accounting Act (cf. the Limited Liability Companies Act/Public Limited Companies Act § 2-7).

For contributions in-kind, special rules apply:

• A report on the contributions must be prepared

• The report must be included in the establishment documentation

• This is regulated by the Limited Liability Companies Act/Public Limited Companies Act § 2-6 in conjunction with § 2-4 second paragraph

These special rules are important as contributions in-kind can be difficult to value, and it must be ensured that the company actually receives the value as share capital.

Post-establishment in public limited companies

For public limited companies, a special rule on so-called post-establishment applies (cf. Public Limited Companies Act § 2-10 letter a). The rule implies that certain agreements for the company to acquire assets from a shareholder or founder within two years after registration in the Register of Business Enterprises must be approved by the general meeting. The purpose is to prevent circumvention of the strict rules on valuation and control of assets.

Registration in the Register of Business Enterprises

Deadlines and requirements for registration

The company must be reported for registration in the Register of Business Enterprises within three months after the establishment documentation is signed (cf. the Limited Liability Companies Act/Public Limited Companies Act § 2-18 first paragraph). Before the company is reported to the Register of Business Enterprises, the share contribution must be fully paid (cf. the Limited Liability Companies Act/Public Limited Companies Act § 2-18 second paragraph).

Consequences of failure to register

If the reporting deadline is missed, registration cannot take place (cf. the Limited Liability Companies Act/Public Limited Companies Act § 2-18 third paragraph first sentence). The consequences of this are severe:

• Obligations under the establishment document are no longer binding

• Share subscriptions are no longer binding

• Other obligations under the establishment document lapse

In case of incomplete notifications, the error can be "repaired" by rectifying it within a deadline set by the Register of Business Enterprises. If the corrected notification is received within the deadline, it will be considered as timely submitted.

Legal effect of registration

Registration is not a validity requirement for the formation of the company. However, before the company is registered, it can generally not incur debt or other obligations or be allocated rights (cf. the Limited Liability Companies Act/Public Limited Companies Act § 2-20 first paragraph).

Certain exceptions apply to this general rule:

• The rule only applies to rights and obligations towards "third parties"

• The rule does not include rights and obligations towards shareholders, management, and auditors

• The rule also does not include rights and obligations that follow from the establishment document

• An unregistered company can declare bankruptcy, be a separate legal entity, a separate tax entity, be a titleholder in the land register, etc.

Liability for obligations before registration

For obligations incurred by the company in its name before registration, those who incurred the obligations are personally, unlimitedly, and jointly liable (cf. the Limited Liability Companies Act/Public Limited Companies Act § 2-20 second paragraph first sentence). This liability persists until the company is registered. From the time of registration, the company assumes the obligation (cf. the Limited Liability Companies Act/Public Limited Companies Act § 2-20 second paragraph second sentence).

Establishment of a general partnership

Differences from limited companies

The Partnerships Act contains no rules on establishment documents and registration requirements for general partnerships. The law only provides provisions on the partnership agreement and what it should contain (cf. the Partnerships Act § 2-3).

This is primarily because:

• There is no obligation to make capital contributions in a general partnership

• There are no requirements for bound partnership capital

Registration of a general partnership

The Business Enterprise Registration Act nonetheless contains rules on registration requirements and the registration of general partnerships (cf. among others the Business Enterprise Registration Act §§ 2-1 no. 3, 3-4, and 3-7). The necessary information to register the company is practically provided through electronic completion of the "Coordinated Register Notification" to the Central Coordinating Register for Legal Entities.

Summary

The establishment and registration of companies in Norway follow formal procedures that vary by company type. The electronic implementation through Altinn has simplified the process, but the legal requirements regarding the content itself are maintained. Registration in the Register of Business Enterprises marks an important transition in the company's legal status, particularly in terms of liability limitation and the ability to incur obligations.