Director / officer requirements in Norway - DLA Piper Guide to Going Global

Form of entity

Private limited liability companies (private LLCs)

Separate and distinct legal entity managed by a board of directors, which is responsible for making major business decisions. The board of directors also has a supervisory function in relation to the company's activities and the executive managers of the company. Directors are elected by the shareholders of the company. Employees may have right to appoint a minority of the board members if the number of employees exceed certain thresholds. The day-to-day operations of the company are usually carried out by the general manager, who is appointed by the board of directors. However, private LLCs are not obligated to have a general manager. If no general manager is appointed, the chairman of the board of directors is responsible for the day-to-day management. The shareholders of the company constitute the general meeting, which is the superior body of the company.

Public limited liability companies (public LLCs)

Separate and distinct legal entity. Governmental structure of public LLCs is unitary with private LLCs. Public LLCs must have a general manager which is responsible for the day-to-day management of the company. The general manager is appointed by the board of directors. Only public LLCs or other similar foreign companies can be listed on a regulated market.

Partnerships with unlimited liability

Separate and distinct legal entity managed by the partnership meeting. Partnership meeting can appoint a board of directors and a general manager to manage the company and handle the day-to-day responsibilities.

Entity set up

Private LLCs

Unlimited number of shareholders
No personal liability for shareholders
Taxed on its earnings at a corporate level. Shareholders are taxed on any distributed dividends
Typical charter documents include: memorandum of incorporation, articles of association and shareholders' register
Board of directors has the overall management responsibility. General manager has the day-to-day responsibility
Shareholders subscribe for shares in a company. A company may have different share classes, for instance ordinary shares and preference shares
Incorporation has to be registered in the Norwegian Register of Business Enterprises (the NRBE), within 3 months of incorporation

Public LLCs

Unlimited number of shareholders
No personal liability for shareholders
Taxed on its earnings at a corporate level. Shareholders are taxed on any distributed dividends
Typical charter documents include memorandum of incorporation and articles of association
Shareholders are registered in a shareholders' register at a securities depository

Partnerships with unlimited liability

Unlimited number of partners
As a general rule, partners jointly have unlimited liability for all of the company's obligations. However, partners may agree in the partnership agreement that they will be severally liable according to its pro rata ownership in the partnership
Not taxed on its earnings at a corporate level. Partners are taxed at their individual rates based on each partner’s part of the profits
Typical charter documents include: partnership agreement
Every partner has to sign the partnership agreement. Since this agreement is registered with the NRBE, the identity of partners is public information

Minimum capital requirement

Private LLCs

NOK30,000.

Public LLCs

NOK1 million.

Partnerships with unlimited liability

No minimum capital requirement.

Legal liability

Private LLCs

Shareholders' liability is generally limited to the shareholders' equity contributions.

Public LLCs

Shareholders' liability is generally limited to the shareholders' equity contributions.

Partnerships with unlimited liability

Partners are jointly liable for all partnership's obligations. However, partners can agree to be severally liable for the partnership's obligations.

Tax presence

Private LLCs

Private LLCs are taxed at 2 levels. At first a private LLC pays a corporate tax on its corporate income; next a private LLC distributes profits to shareholders who then pay income tax on those dividends. Dividend received by legal entities being shareholders may be taxed at a lower level.

Public LLCs

Public LLCs are taxed at 2 levels. First, a public LLC pays a corporate tax on its corporate income; next a public LLC distributes profits to shareholders who then pay income tax on those dividends. Dividend received by legal entities being shareholders may be taxed at a lower level.

Partnerships with unlimited liability

Pass-through entity with only 1 level of taxation. The partnership profits "pass through" to the partners, who then pay taxes on the profits at their individual tax rates.

Incorporation process

Private LLCs

Incorporation starts with signing a memorandum of incorporation setting out among other the name of the purpose, the number of shares, the nominal value of each share and the share capital. Subsequently, the minimum share contribution has to be made. If the contribution shall be made in cash, the company has to establish a bank account with a financial institution in Norway or in another EEA state to make the contribution. Following this, incorporation of the company is filed on a coordinated register notification with the NRBE along with the memorandum of incorporation, articles of association and a declaration from an auditor or – if the contribution shall be made in cash only – a financial institution in Norway or in another EEA state, a lawyer or a state-authorized public accountant confirming that the share capital has been paid to the company mentioned. If some part or all of the share capital is going to be contributed as non-cash contributions, a statement from the founders regarding the contribution in kind, confirmed by an auditor, also has to be filed with the NRBE.

Public LLCs

The incorporation process for public LLCs is similar to the process for private LLCs.

Partnerships with unlimited liability

Incorporation starts with signing a partnership agreement setting out among other the name of the partners, the purpose, the ownership percentage and whether the partners' liability is pro rata or joint and several. If the partners are obligated to pay a contribution to the partnership, the partnership agreement has to reflect this. If a partnership will have a board of directors and/or an auditor, partnership meeting minutes with appointments and a declaration of willingness from the auditor will have to be attached as well. Following this, incorporation of the company is filed on a Coordinated Register Notification with the NRBE along with the partnership agreement attached.

Business recognition

Private LLCs

Well regarded and widely used.

Public LLCs

Well regarded, but not widely used because private LLCs fits most company requirements.

Partnerships with unlimited liability

Well regarded, but not widely used except in particular sectors.

Shareholder meeting requirements

Required to hold an annual general meeting/partnership meeting to approve the annual accounts and other items required by law and, with respect to private and public LLCs, the articles of association or, with respect to partnerships, the partnership agreement.

Board of director meeting requirements

Private LLCs

At least 1 meeting each year to approve annual accounts. Further required to hold board meetings to resolve matters of unusual or significant nature, as well as matters to be resolved by the board of directors in accordance with the Norwegian Private Limited Liabilities Companies Act.

Public LLCs

At least 1 meeting each year to approve annual accounts. Further required to hold board meetings to resolve matters of unusual or significant nature, as well as matters to be resolved by the board of directors in accordance with the Norwegian Public Limited Liabilities Companies Act.

Partnerships with unlimited liability

If a partnership has appointed a board of directors, at least 1 meeting each year to approve annual accounts is required.

Annual company tax returns

Private LLCs

Must annually file tax returns and annual accounts with government authorities.

Public LLCs

Must annually file tax returns and annual accounts with government authorities.

Partnerships with unlimited liability

Partnerships must file a tax return, in addition to a tax return filed by each partner, which partners file together with their respective annual tax returns. A partnership is transparent for tax purposes, and each partner is taxable for their proportionate share of income.

Business registration filing requirements

It is required with initial registration, as well as annual filings.

Business expansion

No need to change form of entity as business expands.

Exit strategy

Private LLCs

Resolution by the general meeting to dissolve the company is filed with the NRBE. Following a mandatory 6-week creditor notice period, the final dissolution documents are filed with the NRBE.

Public LLCs

Resolution by the general meeting to dissolve the company is filed with the NRBE. Following a mandatory 6-weeks' creditor notice period, the final dissolution documents are filed with the NRBE.

Partnerships with unlimited liability

Resolution by a partnership meeting to dissolve a partnership is filed with the NRBE. Following a mandatory 6-week creditor notice period, final dissolution documents are filed with the NRBE.

Annual corporate maintenance requirements

Private LLCs and public LLCs must file a register of shareholders as of December 31 each year by January 31.

Director / officer requirements

Private LLCs

All directors must be of age. Therefore, directors must be above the age of 18 and have legal capacity to act. If the company has 3 or more directors, certain requirements apply with respect to gender composition of the board of directors. These requirements are being implemented in stages between 2024 and 2028. By July 1, 2028, companies which, at the date of its most recent annual accounting, have either (i) combined operational and financial revenues above NOK50 million, or (ii) more than 30 employees, shall have a board composition which ensures that both genders are represented by approximately. 30-50 percent or more on the board (this percentage varies depending on the total number of directors). The same applies in stages to certain companies as follows:

By December 31, 2024, for companies which, at the date of its most recent annual accounting, have combined operational and financial revenues above NOK100 million;
By June 30, 2025, for companies which are not encompassed by the bullet point above, which, at the date of its most recent annual accounting, have more than 50 employees;
By June 30, 2026, for companies which are not encompassed by the 2 bullet points above, which, at the date of its most recent annual accounting, have more than 30 employees; and
By June 30, 2027, for companies which are not encompassed by the 3 bullet points above, which, at the date of its most recent annual accounting, have combined operational and financial revenues above NOK70 million.

Where 3 or more directors are to be elected by and from the employees, all such directors shall not be of the same gender, unless more than 80 percent of the employees are of the same gender. Where there are more than 200 employees, both genders shall be represented by approximately 30-50 percent or more among the directors elected by the employees.

Public LLCs

All directors must be of age. Therefore, directors must be above the age of 18 and have legal capacity to act. There are further requirements regarding the gender composition of the board. In essence, it is required that both genders are represented by approximately 30-50 percent or more on the board.

Where 2 or more directors are to be elected by and from the employees, all such directors shall not be of the same gender, unless more than 80 percent of the employees are of the same gender. Where there are more than 200 employees, both genders shall be represented by approximately 30-50 percent or more among the directors elected by the employees.

Partnerships with unlimited liability

All directors must be of age. Therefore, directors must be above the age of 18 and have legal capacity to act.

If the company has 3 or more directors, certain requirements apply with respect to gender composition of the board of directors. These requirements are being implemented in stages between 2024 and 2028. By July 1, 2028, companies which, at the date of its most recent annual accounting, have either (i) combined operational and financial revenues above NOK50 million, or (ii) more than 30 employees, shall have a board composition which ensures that both genders are represented by approximately. 30-50 percent or more on the board (this percentage varies depending on the total number of directors). The same applies in stages to certain companies as follows:

By December 31, 2024, for companies which, at the date of its most recent annual accounting, have combined operational and financial revenues above NOK100 million;
By June 30, 2025, for companies which are not encompassed by the bullet point above, which, at the date of its most recent annual accounting, have more than 50 employees;
By June 30, 2026, for companies which are not encompassed by the 2 bullet points above, which, at the date of its most recent annual accounting, have more than 30 employees; and
By June 30, 2027, for companies which are not encompassed by the 3 bullet points above, which, at the date of its most recent annual accounting, have combined operational and financial revenues above NOK70 million.

Where 3 or more directors are to be elected by and from the employees, all such directors shall not be of the same gender, unless more than 80 percent of the employees are of the same gender. Where there are more than 200 employees both genders shall be represented by approximately 30-50 percent or more among the directors elected by the employees.