What should be done if you wish to dissolve your Norwegian limited liability company

August 19, 2024

Reasons and Steps for Dissolving an LLC in Norway

There can be numerous reasons for deciding to dissolve a company, ranging from unprofitability, market crises, to conflicts among shareholders and the management. While we hope no company reaches this point, it's essential to understand the necessary steps for dissolution. Note: This guide does not cover compulsory dissolution, such as in the case of bankruptcy.

Steps in the Liquidation Process of a Norwegian Company

Decision to Dissolve: The first step in the liquidation process is making a formal decision by the general meeting of shareholders (generalforsamling). This decision must be documented and reported to Brønnøysundregistrene, the Norwegian business register.
Responsibility for Closure: Once the decision is made, the board members (styre) are responsible for carrying out the liquidation process.
Notification of Dissolution (melding om oppløsning): The company must officially announce its intention to dissolve by publishing the information in Brønnøysundregistrene. This notice must include the appointment of liquidators and a call for creditors to submit their claims.
Ceasing Operational Activities: The board, acting as the liquidation body, is responsible for ending the company's operational activities, which includes settling all obligations, selling assets, and satisfying creditors' claims.
Distribution of Assets (fordeling av eiendeler): After settling all liabilities, the remaining funds are distributed among the shareholders according to their shares in the company. Note: Be informed about VAT implications in this scenario.
Preparation of Final Accounts (årsoppgjør): The final financial statement must be approved by the general meeting of shareholders. This document contains detailed information about the liquidation process and the company's final balance.
Reporting the Dissolution to the Register: The final step is reporting the completion of the liquidation to Brønnøysundregistrene. Upon approval by the register, the company is officially dissolved.

Tax Aspects of Company Dissolution in Norway

During the liquidation of a limited liability company, it is crucial to comply with tax regulations. The Norwegian Tax Administration (Skatteetaten) requires all tax liabilities to be settled before the liquidation process concludes. This includes submitting the appropriate tax returns and paying any outstanding taxes.

Document Retention

According to regulations, the company's accounting documentation must be retained for a specified period even after its dissolution. Typically, this period is five years from the end of the financial year in which the liquidation was completed.

Summary

Voluntary liquidation of a limited liability company in Norway requires careful planning and adherence to numerous legal and tax formalities. Properly conducting the liquidation is crucial to avoid future legal issues and ensure that all obligations to creditors and shareholders are appropriately settled.