- Are you looking for professional accounting services?
- Phone: +0047 93982173 XNUMX
- Service in Polish
- Discounts for new customers
- Topnor www.topnor.no
Limited company - a good or bad way to a company in Norway?
The entrepreneurship of Poles living in Norway is admirable. According to official data, there are 40 Poles out of a population of almost XNUMX. registered business entities – mainly in construction industry. This means that 40% of Polish citizens run their own businesses. For this reason, it is worth knowing what types of business activities there are. What legal issues are associated with them and what does the tax system look like?
In the previous post we discussed the subject of establishing and running a sole proprietorship. The difference in running a capital company results primarily from the responsibility borne by the entrepreneur. While in the case of a sole proprietorship, its owner is responsible for the liabilities with all his assets, in the case of a capital company this liability is limited to the amount of the share capital.
Capital company in Norway - pluses
In addition to the issues of limited liability for property obligations, there are additional benefits. Capital companies enjoy greater trust in the Norwegian business environment, therefore it is easier to win lucrative contracts. In addition, this type of business has a greater chance of obtaining bank loans and other sources of financing. There is also a chance to acquire an additional shareholder who, by contributing to his contribution, will increase the company's share capital, and thus create greater opportunities for the company's development.
Limited Liability
The above benefits are due to the fact that not only one person is responsible for financial results. This is the case with a sole proprietorship. It is spread over the entire management board of the company, and the financial flow in such an economic entity is transparent for both the bank and potential contractors.
Employee privileges
Running a capital company is also beneficial from the point of view of employee issues. Each member of the management board may be employed on the basis of an employment contract, and thus they are entitled to all employee privileges, including holiday entitlement, sickness benefits, unemployment benefits as a result of unemployment, etc.
Capital company in Norway - cons
In addition to the above-mentioned benefits, running a capital company in Norway is associated with certain limitations. These are mainly inconveniences related to formal issues that begin with the registration of the company. This process is longer and more costly than when starting a sole proprietorship. The time to register a capital company lasts from 3 to 4 weeks and is related to the following expenses:
- payment of share capital in the amount of PLN 30 thousand Norwegian kroner
- fee for entry in the Register of Entrepreneurs in the amount of NOK 5570 if the application is submitted electronically or NOK 6797 in the case of a paper application
Greater formalities
Running a capital company is also associated with more formalities. Above all, the obligation to organize an annual board meeting should be maintained. Additionally, each cash flow must be documented. There must be no private funds or unjustified expenses on the account of a limited company.
Larger formalities also result from greater billing and reporting obligations. A capital company is obliged to make detailed financial settlements with the tax office. Full bookkeeping and accounting are also carried out, which entails the need to document each income obtained and each expense made.
Aksjeselskap joint-stock company in Norway - for whom?
Establishing and running a company in Norway is burdensome from a formal point of view. This is not a legal form dedicated to people who want to act alone. However, this solution is suitable for those who are able to predict financial results and who deal with large capital. From the point of view of development opportunities, greater trust in the business environment and on the financial market also speaks in favor of a capital company. This gives you the opportunity to enter into lucrative and long-term contracts. For this reason, this legal form running a business is suitable for those who run or want to run a large-scale business. However, it is unfavorable for people who provide services individually - e.g. small general construction services, etc.
