Choosing Legal Structure
The "right" legal structure for you must be determined based on a specific assessment of your circumstances; the various legal structures all have their advantages and disadvantages.
Your choice of legal structure will partly depend on whether you want to be an employee of your own business, the level of risk you are prepared to take, the scope involved, and the number of owners that will be involved. You can change to a different legal structure later, but you will usually not be able to keep the same organisation number if you do.
If you are planning to set up a business, the choice will often be between a sole proprietorship, a private limited company, a general partnership or a cooperative.
|Text||Sole proprietorships||Private limited companies (AS)||General partnerships (ANS/DA)||Co-operatives (SA)|
|Number of owners||1||1 or more||2 or more||2 or more|
|Capital requirement||No legal requirements||At least NOK 30,000||No legal requirements||No legal requirements|
|Liability||Unlimited liability (The owner will be liable for all debts)||Limited liability (Liability limited to the invested share capital)||Unlimited liability (ANS: Jointly and severally liable for all debts. DA: Liable for the agreed share of all debts.)||Limited liability (Limited to any shareholding)|
|Formal requirements||Few formal requirements||Many formal requirements||Many formal requirements||Many formal requirements|
|Social security rights||Entitlement to sick-pay from the 17th sick day (80% of sick-pay basis) No unemployment benefit in event of unemployment||Entitlement to sick-pay from the first sick day (100% of sick-pay basis) Unemployment benefit in event of unemployment||Entitlement to sick-pay from the 17th sick day (80% of sick-pay basis) No unemployment benefit in event of unemployment||Entitlement to sick-pay from the first sick day (100% of sick-pay basis) Unemployment benefit in event of unemployment|
An association is a separate legal person controlled by its members. It does not cost (if it is not a commercial business) anything to register an association. There is no law regulating the form of associations, so it is important to draw up appropriate articles of association. An association must have at least two founders, members cannot have a share in the association and no form of profit of any kind can be distributed to the members.
A foundation is a separate legal person that is created to manage an asset, also known as 'founding capital', of at least NOK 100,000. Commercial foundations must have founding capital of at least NOK 200,000. It is the foundation's board that manages the asset in the foundation.
On their websites, the Brønnøysund Register Centre and the Gaming and Foundation Authority provide information on the registration, operation and winding-up of associations and foundations.
E-guide for choosing legal structure
Are you unsure of which legal structure to choose?
By answering three questions in our e-guide, you will find answers to which legal structure may be relevant to you.Start Guide