Share capital – what can the NOK 30,000 be used for?
After registration the money can be used in the business. Share capital is not an amount that has to sit untouched in an account – it is a restricted part of the equity that cannot simply be distributed to shareholders. What matters is not the bank balance but that the company has adequate equity and liquidity at all times under sections 3-4 and 3-5 of the Companies Act.
What share capital actually is
A Norwegian limited company has to have at least NOK 30,000 of share capital, divided into one or more shares of the same nominal value. A company might have NOK 30,000 of share capital, 100 shares and a nominal value of NOK 300. Share capital is restricted equity. But «restricted» does not mean NOK 30,000 has to sit in a bank account. It mainly means the company cannot simply distribute that amount to its shareholders.
Share capital is not money in an account
Picture a new company with NOK 30,000 in the bank and NOK 30,000 of equity. The company buys a computer for NOK 12,000. The bank account falls to NOK 18,000, but the company has gained a computer worth NOK 12,000. The company has not «lost» NOK 12,000 – it has swapped one asset for another. It is therefore entirely possible to have less than NOK 30,000 in the account, more than NOK 30,000 in total assets, and still NOK 30,000 of registered share capital, with nothing wrong.
Formation costs can be covered by the company
The company can cover the formation costs where that is handled under section 2-5: the memorandum has to state which costs the company will cover, how they were calculated and who is to receive payment. A company can therefore in practice start trading with less than NOK 30,000 in the bank shortly after registration – and that is not in itself a problem.
Can the owner simply transfer money to themselves?
No. Money can go from the company to the owner in particular ways: salary for genuine work, a dividend within the company's distributable limit, repayment of documented tax-paid-in capital, or reimbursement of expenses against documentation. A transfer with no basis is not one of them. Private use of the company's assets can also create a taxable benefit – see Dividends from your own AS and Benefits in kind
Can the company lend money to the owner?
Under section 8-7 a company can as a general rule only lend or give security in favour of a shareholder within certain limits, and adequate security normally has to be provided. For tax the starting point is stricter: a loan to a personal shareholder is as a general rule treated as a dividend. There is an exception for total credit under NOK 100,000 dealt with within 60 days. The whole picture, including what happens on repayment, is in Loans from your own company
How much of the share capital can the company lose?
There is no rule that the equity always has to be at least NOK 30,000 after formation. Losses can reduce it. But section 3-4 requires the company at all times to have equity and liquidity that are adequate for the risk and scope of the business. That is a continuing duty, not an annual test.
When does the board's duty to act arise?
Section 3-5 says that where the equity must be assumed to be lower than is adequate, the board has to deal with the matter immediately. The board then has to call a general meeting within a reasonable time and give an account of the company's financial position. Where the equity is not adequate, the board has to propose measures. The duty is therefore triggered by the adequacy assessment – not by a particular amount being breached. What happens if the board does not act is in Directors' liability and personal liability
Negative equity does not automatically mean bankruptcy
A company can have negative book equity and still be able to pay its obligations as they fall due. The bankruptcy conditions are about insolvency – an inability to pay combined with insufficient assets – not about a negative figure in the balance sheet alone. The difference is covered in Served with a bankruptcy petition But negative equity is a clear signal that the board's duty to act may have been triggered.
Share premium where the company needs more than NOK 30,000
Where the company needs more capital than the minimum, the shares can be subscribed at a price above nominal value. A company can be formed with NOK 30,000 of share capital and NOK 70,000 of share premium, so that the total paid in is NOK 100,000. That gives the company more working capital without tying up more in share capital – and without having to carry out a capital reduction later if the money is to come out. See also Share issues in a limited company
In short
Does NOK 30,000 have to sit in an account? No. Can the money be used in the business? Yes, after registration. Can the owner transfer it to themselves? Only through salary, a lawful dividend, repayment of paid-in capital or documented expenses. Does the equity always have to be at least NOK 30,000? No. But the board has to make sure the equity and liquidity are adequate at all times. We can assess the distributable limits, the equity position and the documentation around withdrawals from your own company.
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This is general guidance, not advice on your specific case. Deadlines, rates and amounts change – always check the current rules, or get in touch with us.
More on starting up and choosing a company form
- Sole proprietorship or limited company – which should you choose?
- When should a sole proprietorship become a limited company – and can the conversion be tax-free?
- How to start a limited company – step by step
- Contributions in kind – can a car, equipment or a business be used as share capital?
- NUF – what is it, and when does it make sense?
- ANS or DA – what is the difference, and how large is the personal liability?
- Your first year with a limited company – which deadlines and tasks matter?
- The shareholders' agreement – what should it contain, and when do you need one?
- When do you need an accountant – and when can you manage yourself?
- Winding up a limited company – how to dissolve and delete it
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