Anyone resident within the EU/EEA can acquire and run a business in Norway. The acquisition can take the form of buying the contents of the enterprise, e.g. by transferring stocks, operating equipment, fixtures and premises to another new start-up, or by buying into an existing enterprise which then continues to run. The rules covering sale and transfer depend on the legal structure of the enterprise.
Types of takeover
Acquisition of the whole enterprise
Purchasing an existing business may be risky, but it is often easier than starting a completely new one. It is risky because you will be taking over all the liabilities, but easier because you will be taking over an established market and customer base.
Purchase of contents
Purchasing the contents may be advantageous for several reasons. Purchasing the assets, for example, means that they will simply be transferred to the new business; this avoids taking over any debts. Purchasing parts of the business is also a possibility; then you only acquire what is specified in the contract of sale.
In the case of inheritance, the transfer is generally free of charge to the acquirer. However, the respective Acts place limits on the right to inherit an interest in the enterprise depending on its legal structure. In cases where interests or shares are transferred, the ownership position must be registered in the same way as an ordinary transfer of interests/shares in the business concerned. The tax rules should be thoroughly examined in connection with the transfer of parts of an estate. The rules on this are contained in the Tax Act.
The takeover process step by step
Whether you are purchasing the whole enterprise or only the contents, it is extremely important to draw up a good contract of sale. When buying an enterprise, a full analysis of the whole business should be undertaken. This is to reduce the risk of unpleasant surprises after the purchase has gone through.
Such an analysis is often referred to as 'due diligence'. Due diligence helps to avoid any unpleasant surprises and confusion after the takeover. The seller may also have an interest in preventing disputes at a later date.
Make a thorough examination of budgets/accounts/audits, borrowing, securities, possible guarantee commitments, maturing insurance policies, obsolete stock, order books, etc.
Make use of specialist expertise
It may be appropriate to seek help from a lawyer or management consultant with the right expertise when you are examining the business and in the actual negotiations.
It may be sensible to obtain guarantees from the seller, where the seller vouches for the true position in the business when the contract is signed.
One of the most common valuations performed in connection with the purchase of an enterprise is to determine the value of the business and the purchase price to be paid. To obtain a realistic valuation of the enterprise, it may be helpful to seek assistance from someone with specific knowledge of the relevant sector. Auditors, management consultants and lawyers can also assist with such valuations.
Be aware that suppliers, banks, customers and lenders can cancel contacts when ownership changes. It is therefore important to review the contracts and enter into legal negotiations with the parties involved where necessary.
If the purchase includes real estate, stamp duty (2.5 %) will be payable to the State as an extra expense.
Where settlement is not made all at once but spread over time, you must ensure that the seller receives his or her money. This may be done, for example, by the purchaser lodging a bank guarantee or personal security.
Retiring business owners need to plan the transfer of their business in advance.
Some standard requirements to be completed when taking over a business are the same as when setting up a new business.
The procedures to be followed when transferring a business will depend on the legal structure of the enterprise.
- The transfer of an unlimited liability partnership is governed by the Partnerships Act
- The transfer of a limited liability company is governed by the Limited Companies Act
- The transfer of a cooperative is governed by the Cooperatives Act
When shares in an unlimited liability partnership are transferred, this must be entered in the Register of Business Enterprises, and the partnership agreement must be updated with the names of the new partners.
When shares in a limited company are transferred, the purchase must be recorded in the register of shareholders. If the purchase of shares entails changes to the board or the articles of association, these must be reported to the Register of Business Enterprises.
Shares in cooperatives cannot generally be transferred or sold to others unless such a sale is covered by the articles of association. Shares linked to real property may also be transferred to new owners together with the property provided that the articles of association do not specify otherwise. New shareholdings are entered in the register of shareholders.
There are separate rules for calculating value-added tax on transfers of companies/parts of companies; see VAT Act, Section 6-14.
New personal participants in a partnership or similar must contact the Tax Office themselves to report that they have a holding in the enterprise.
Altinn is an online portal and a technical platform for submitting electronic forms to public bodies, but it also offers electronic services such as notices from public bodies and inspection of public registers. Among other things, users can register a business, submit VAT returns and send in self-assessment forms for both individuals and companies.
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