Are you planning to liquidate a limited liability company? The process can quickly feel both overwhelming and time-consuming. That’s why it’s important to proceed in a structured and correct manner – to avoid unnecessary costs, mistakes, and delays. In this blog, you’ll find a practical and easy-to-understand step-by-step guide to dissolving a limited company.
Step 1: Decision on dissolution
The company's board of directors is responsible for carrying out the liquidation, and it all starts with the general meeting deciding to dissolve the company. A company can only be liquidated voluntarily if the company has more assets than liabilities. Therefore, before you decide to dissolve the company, you should obtain an overview of the company's financial situation. As soon as the general meeting has resolved to dissolve the company, the decision is reported to the Register of Business Enterprises. There, an announcement is published that the company is in the process of being liquidated, and the creditor deadline of six weeks begins to run.
Step 2: The liquidation period
During the liquidation period, the board of directors should shut down operations, wind up and notify suppliers and creditors. The operations of the company can continue for as long as it is necessary for liquidation. The company assets shall be converted into cash and its liabilities settled. Creditors must either have their claims met or agree to an arrangement of debt relief, or another party takes the company's place. The board shall also ensure that any outstanding receivables are collected.
It is important to ensure that all contracts are cancelled and that employees are informed and handled correctly. The company must also report and pay taxes during this period, and the necessary information must be submitted to the tax authorities.
Also read: Workforce reductions in Norway: Be aware of the employee rights
NEED HELP WITH YOUR NORWEGIAN LIMITED LIABILITY COMPANY?
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Step 3: Liquidation balance sheet and distribution to shareholders
The board of directors is obliged to prepare a liquidation balance sheet, which must be made available to the shareholders. Such a balance sheet gives the shareholders an overview of the company's assets, rights and obligations. The balance sheet must be presented to the shareholders so that they can gain an insight into the company's financial position during liquidation. When the creditor deadline has expired and all debts have been settled or secured, the company can make a distribution to the shareholders.
Step 4: Final financial statement and the final liquidation of the limited liability company
After the distribution has been completed, the board prepares a final financial statement. This Final financial statement is presented to the general meeting for approval. When the general meeting has approved of the final settlement and decided to finally dissolve the company, the company is considered to be officially dissolved. This decision must be reported to the Register of Business Enterprises, so that the liquidation is formally completed.
Even if the company is now officially dissolved, some formalities often remain. The annual accounts for the year of liquidation and the shareholder register statement must be submitted. The company's bank accounts must also be closed.
Not sure if your limited liability company should be liquidated?
Are you uncertain whether you should liquidate your limited company in anticipation of the next assignment in Norway? You can safely leave the company on hold without liquidating. However, it's important to remember that the reporting obligations still apply, including submitting annual accounts, tax returns, VAT returns and shareholder register statements, even if the company has no turnover during the period.
Also read: Board member requirements in Norway
Do you need help with the liquidation of your limited company?
In this blog, we've looked at the key steps in liquidating a limited liability company. The liquidation process requires structure and proper handling of both creditors and public authorities. In our experience, many want legal assistance to ensure that everything is done correctly and in the right order.
Do you need help dissolving a limited liability company in Norway? Don’t hesitate to contact our team, and we will guide you safely through the process.
NEED HELP WITH YOUR NORWEGIAN LIMITED LIABILITY COMPANY?
Our corporate lawyers have extensive experience and are here to assist.
