What has to be done in the year-end close for a company and a sole trader?
The balance sheet has to be documented item by item, income and costs allocated to the right year, and fixed assets, inventory and holiday pay assessed. Then the paths separate: a limited company has to prepare and file annual accounts, while an ordinary small sole proprietorship normally just reports the business income in the owner's tax return. The deadline for the tax return and the business specification is 31 May.
Four words that do not mean the same thing
The year-end close is the process of closing, reconciling and correcting the bookkeeping for the year. The annual accounts are the formal financial statements that businesses subject to the Accounting Act prepare. The tax return reports taxable income, wealth and other tax information to Skatteetaten. The business specification is the part of the tax return where the business's accounting and tax information is set out. They are often confused, and one confusion is worth noting straight away: the tax return is not accepted as annual accounts by the Register of Company Accounts. They are two separate filings to two different recipients.
The main difference between a company and a sole trader
A limited company is a separate legal and taxable person. Every Norwegian AS has to prepare annual accounts. An ordinary small sole proprietorship normally does not have to prepare annual accounts under the Accounting Act, although it can still have bookkeeping obligations and has to report the business income in the owner's tax return. A sole proprietorship normally becomes subject to the Accounting Act where it has assets worth over NOK 20 million, or on average more than 20 full-time equivalents. One that is subject also has to file annual accounts with the Register of Company Accounts. A duty to keep books and a duty to prepare annual accounts are therefore two different obligations, and a sole trader can have the first without the second.
Start with the balance sheet
A good year-end close starts not with the result but with the balance sheet. Every material balance sheet item should be documentable and explainable: bank deposits, trade receivables, trade payables, loans, taxes and duties, payroll items, holiday pay, inventory and fixed assets. Payroll and employer's contributions should be reconciled against the reconciliation information from Skatteetaten. The old A06 statements no longer exist – see A monthly checklist for the payroll run A balance sheet item you cannot explain is an item that can become a question on an audit.
Income and costs have to land in the right year
Common year-end items are accrued costs, prepaid costs, earned but uninvoiced income and income received in advance. Accruals like these can move the result considerably. In many businesses it is depreciation that moves it more. Depreciation is a form of accrual too: the cost of an asset is spread over several years instead of falling entirely in the year it was bought. Why the result and the bank account say different things is in Accruals
Fixed assets, inventory and holiday pay
Machinery, vehicles, fixtures, IT equipment and other larger assets have to be assessed: should they be capitalised, and in which depreciation group? See Depreciation – groups and rates Where the business holds inventory, the stock has to be documented at the year end – see Inventory at the year-end close Where the business has employees, accrued holiday pay not paid by the year end normally has to sit as a liability in the balance sheet, along with the related employer's contributions. The rates are in Holiday pay
Tax in a limited company
Ordinary corporation tax in 2026 is 22% of taxable general income. The accounting result has to be adjusted for permanent and temporary differences before the tax is calculated. The accounting result and the taxable result are rarely the same.
Tax in a sole proprietorship
A sole proprietorship is not a separate taxable person. Net business income forms part of the owner's general income, and personal income is calculated under the business model rules. The national insurance contribution on other business income is 10.8% in 2026 – against 7.6% on salary. The lower threshold in personal income for calculating the contribution is NOK 99,650. That difference is one reason the choice between a sole proprietorship and a limited company is not only a question of liability.
What do the annual accounts have to contain?
Annual accounts have to contain at least a profit and loss account, a balance sheet and notes, and the note references have to match the notes. On top of that, for those it applies to: a directors' report and a cash flow statement – neither for entities following the small-entity rules – sustainability reporting for those required to produce it, and an auditor's report where the company is subject to audit.
Is the company a small entity? The test is not what you think
Section 1-5 of the Accounting Act divides entities into four categories, and the test is that the entity exceeds one or none of three thresholds – not that it falls below all three. Micro entities: balance sheet total NOK 5m, sales revenue NOK 10m, 10 full-time equivalents. Small entities: balance sheet total NOK 84m, sales revenue NOK 168m, 50 full-time equivalents. Large entities: exceed at least two of balance sheet total NOK 290m, sales revenue NOK 580m and 250 full-time equivalents. Medium-sized entities are those that are neither micro, small nor large. The practical point: a company with NOK 100 million in its balance sheet but below the thresholds for revenue and employees exceeds only one threshold and is still a small entity. Micro entities also follow the small-entity rules unless something else is prescribed.
Signing and the general meeting
In a limited company the annual accounts have to be signed by every board member, and by the general manager where there is one. The ordinary general meeting for a calendar-year company has to be held by 30 June.
Deadlines: 31 May, 30 June and 31 July
Tax return and business specification: ordinary deadline 31 May. A one-month extension can be applied for – see The tax return for businesses General meeting: by 30 June. Annual accounts to the Register of Company Accounts: no later than one month after they are adopted. For calendar-year entities 31 July is the last fee-free date. Miss that last one and the late-filing fee runs – see The annual accounts have not been filed. The whole annual cycle is in The annual cycle for a Norwegian AS, and how the work is spread through the year so the close is less of a job is in The financial year month by month We can handle the reconciliation, the close, the annual accounts, the business specification and the tax return for both company forms. Where we are to take the whole close, that is set out in Annual accounts Choosing a company form, or weighing whether a sole proprietorship should become a limited company, is in Sole proprietorship or limited company and When should a sole proprietorship become an AS? Housing co-operatives have their own accounting rules requiring a statement of available funds – see Annual accounts for a housing co-operative
Read more
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 year-end close and reporting
- Statutory audit – when can an AS opt out of an auditor?
- The tax return for businesses – how does it differ from a personal one?
- The shareholder register statement – deadline, content and errors
- Depreciation – which groups and rates apply?
- Inventory at the year-end close – how is it counted and valued?
- Why is the result not the same as the money in the account?
- How long do accounting records have to be kept?
- The annual cycle for a Norwegian AS – which deadlines apply through the year?
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