[ESTABLISHING A BUSINESS ENTITY IN NORWAY] 376
three members, and if the company has a corporate assembly, the board must have at least five members. The board of directors is subject to a requirement for gender representation. The company is also required to have a general manager. 3.1.3 Partnerships The partnership meeting is the highest authority of partnerships. There is no requirement for the partnership to have a board of directors or a managing director. Should the partners decide to have a board of directors or a managing director, the Norwegian Partnerships Act contains rules for their organization. All the partners are authorized to sign on behalf of the company, unless otherwise stipulated in the partnership agreement or where there is a board of directors. All partners are eligible to vote at the partnership meeting, and all decisions must be unanimous, unless the partnership agreement provides otherwise. In a “KS”, the partners are the limited partnership’s highest authority. However, unlike in the unlimited liability partnership, the partners cannot participate in the administration of the partnership. The limited partners must leave the day-to-day administration to the general partner(s) or the board of directors. 3.2 Minority shareholders’ rights and protection 3.2.1 Limited- and public limited companies In limited liability companies, it is not unusual that a majority and a minority disagree on how to run the company. This is because the basic principle of the Corporation law is that decisions are made by majority vote. A minority must generally accept the majority’s decision.
The Norwegian Private Limited Liability Companies Act, however, has some rules that protect the minority. The law includes, among other things, rules for "starvation" of the minority, the right to require notice of an extraordinary general meeting, the right to require an investigation, the right to demand a new election of auditors and the right to assert claims on behalf of the company. Most of these rights require a minority stake of at least 10%
of the share capital. 3.2.2 Partnerships
In partnerships, all partners are members of the partnership meeting. For the partnership meeting to reach a decision, the decision must be unanimous. Unless otherwise agreed to, company shares can only be transferred to a new owner with the consent of all the other participants. However, each participant can, with six months’ written notice, terminate its participation and demand to be released by the company. 4. Foreign Investment, Thin Capitalisation, Residency and Material Visa Restrictions 4.1 Possible barriers for an offshore party There is freedom of establishment for businesses in Norway. That means that you do not have to reside in Norway in order to set up a business here. However, you need to have a Norwegian D-number and a Norwegian business address to establish and operate a business. A D-number is a temporary number assigned to, but not limited to, foreign nationals liable for tax in Norway. If you do not have employees, or do not reside in Norway, you must have a Norwegian representative who is liable for the payment of direct and indirect taxes. If no economic activity is being conducted, the contact person may reside abroad.
ILN Corporate Group – Establishing a Business Entity Series
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