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 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 and a cooperative.

Key differences:

Text Sole proprietorships Private limited companies (AS) General partnerships (ANS/DA) Co-operatives (SA)
Number of owners 1 (+ any spouse) 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

About sole proprietorships

About private limited companies (AS)

About general partnerships (ANS/DA)

About Co-operatives (SA)

If the purpose of your organisation is humanitarian, non-profit, social or similar in nature, you should normally register as an association or foundation.

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. 

The Brønnøysund Register Centre on associations (in Norwegian only)

Stiftelsestilsynet om stiftelser (in Norwegian only)

 

Do you need assistance?

Our business consultants are ready to answer your questions about starting a business in Norway. The service is free of charge.

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