Registering a company

Henrik describes how he started his own company

When I wanted to start my own business, I had to think about the ownership situation of the company. I had these possibilities:

In a sole proprietorship company the owner has the full and entire responsibility for the firm. If I started such a company I could risk losing everything, including my personal belongings. The advantage of this kind of company is that I would make all the decisions myself. I would own the entire company and would be responsible for paying the equity capital and the loan capital myself. I was very much in doubt as to whether I should take this kind of risk.

I could have started a general partnership. That is when two or more owners share the personal responsibility. This is very much like a sole proprietorship, but all the owners have the responsibility together. The owners of the company select a company board that holds the responsibility for and control of daily operations. My live-in partner and I considered this alternative. There are two ways of distributing the responsibility. Joint and several liability is when all the owners share the responsibility equally among themselves regardless of what percentage of the company they own. If the owners do not want to share the responsibility equally, they can form an apportioned liability company, where responsibility is distributed according to the percentage of the company each one owns.

A general partnership uses the letters ANS after the company’s name if it is formed as a joint and several liability company, and DA after the company’s name if it is formed as an apportioned liability company.

The third alternative was to establish a limited liability company. A share of stock is proof of ownership given to a person who has acquired share capital. The person who owns the shares is called a shareholder. In a limited liability company, all shareholders are thus owners. A limited liability company has the abbreviation AS after its name.

Shareholders are responsible for any debt owed by the company, but this is limited to the amount of share contribution made by each shareholder, and they thus have limited liability. The shareholders select a board and a general manager to run the company. This is done at the general meeting held once a year. All the shareholders come to the general meeting. There they make the important decisions about how the company should be run and how any profit should be invested. If there is a large profit, each shareholder gets dividends in relation to how many shares he or she owns. You have to pay tax on the dividends.

In order to start a limited liability company you have to have a minimum of 100,000 kroner in share capital. Because neither my partner nor I wanted to borrow money to start a limited liability company, nor did we want to bring other people into the company, we decided to start a general partnership with joint and several liability, an ANS.

You must be over 18 years of age to start your own company. Both my partner and I were over the age of 18. Some types of enterprises require special authorisation from the authorities, for example door-to-door sales, trade in second-hand goods, serving food and beverages, and some crafts businesses. When we started our company we had to make sure that all of our certificates and transport licences were in order.

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Brønnøysund Register Centre. Photo: Brønnøysundregistrene.

When we had decided what kind of company we wanted to start, we sent notification to the Brønnøysund Register Centre. We searched on the Internet and downloaded a registration form that we filled out and sent in. Then our company received a certificate of registration and a company register number. We were registered automatically in the Register of Business Enterprises for companies that operate businesses.

Because we must pay value-added tax on all our goods and services, we were also registered in the VAT Register at the County Tax Assessment Office. We were also automatically registered in the NAV State Register of Employers and Employees.

We registered both the firm and the employees with the municipal treasurer or tax office, because we had to pay business tax, advance tax for employers and employers’ contribution.

Eventually we registered everyone working for us with the NAV State Register of Employers and Employees in order to ensure their legal rights to social security. All employees are now entitled to a company pension, part of which must be paid by the employer, and therefore we contacted an insurance company and organised that. We also drew up occupational injury insurance for the employees.

There were a lot of papers and forms to organise, but my partner took care of that aspect of the work.

When all the papers were in order we established our company, and we celebrated!

Registering a new company

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