A sole proprietorship is a form of incorporation in which a 'physical person' is liable for a business. This means that he or she is financially liable for all the enterprise's liabilities and obligations.
The owner decides everything to do with the enterprise. There are no separate acts of law regulating sole proprietorships.
The owner must in general be of age (18 years). He or she does not have to be a resident of Norway. However, the enterprise is required to have an address in Norway. The owner of a sole proprietorship is not obliged to set aside funds for the enterprise, since he or she is personally liable in any case.
Exception: minor's right to engage in business activities:
The guardian may with the consent of the County Governor give permission that a minor who has turned 15 years, may operate a specific business activity. The minor may only conduct business in a sole proprietorship.
For tax purposes, a sole proprietorship is assessed together with the person who owns it. This means that the net profit is liable to tax as part of the owner's total income, including, for example, income from employment. In the same way, the net loss will be deductible.
All sole proprietorships can register with the Central Coordinating Register for Legal Entities, and will then be assigned an organisation number. Registration in the Central Coordinating Register for Legal Entities is free of charge. Sole proprietorships are also entitled to register with the Register of Business Enterprises. This is subject to a charge. On registering with the Register of Business Enterprises, the enterprise will be issued with a certificate of registration.
If a sole proprietorship has at least five employees or is a wholesale or retail enterprise, registration with the Register of Business Enterprises is mandatory.
Large sole proprietorships
Sole proprietorships that have employed more than 30 people (on average) during the past three financial years are subject to some of the same requirements as partnerships. These requirements concern the rights of employees to be represented at partnership meetings and, if applicable, on the board.