Reduction of primary capital in commercial foundations
Last updated: 5 August 2024.
A reduction of the primary capital must be reported to the Register of Business Enterprises within six weeks after the decision was made.
A capital reduction is to be announced at the announcement pages of the Brønnøysund Register Centre. If the reduction of the primary capital requires a creditor notice, a creditor time limit of six weeks apply.
A capital reduction that requires a creditor notice, must be reported to the Register of Business enterprises in two steps. These two are decision about capital reduction and implementation.
The board can decide to reduce the primary capital. The board may not make such a decision, if it follows from the statutes, or otherwise is determined by the founder, that the original primary capital cannot be used for distributions. The primary capital can under no consideration be reduced so that it is lower than NOK 200,000.
The amount of reduction can only be used for:
- coverage of losses that cannot be covered in other ways, or
- transfer to another equity capital
The decision must state the reduction amount, and how the amount is to be used. The capital reduction must be reported to the Register of Business Enterprises within six weeks after the decision has been made. If the capital reduction is not reported within the time limit, it will lapse.
Creditor notice
If the reduction amount is to be used in whole or in part for transfer to another equity, the Register of Business Enterprises is to make an announcement of the reduction decision. The creditor deadline is six weeks.
Attachment step 1
You must attach
- minutes from the board meeting showing the decision
When the creditor deadline has passed and the relationship to the creditors has been clarified, a notification of implementing the capital reduction must be submitted to the Register of Business Enterprises. The capital reduction lapses if the notification of implementation has not been received within one year after the reduction was decided.
Attachments step 2
You must attach
- updated articles of association
- a statement from the board and the auditor that the relationship with the company’s creditors is nothing to prevent the implementation
If the capital reduction in whole is to be used to cover losses that cannot be covered in other ways, the reduction can be carried out without creditor notice. You then report both the decision and the implementation in one step.
Decision and implementation
You must attach
- minutes from the board meeting showing the decision
- updated articles of association
- an auditor statement confirming that the reduction amount will cover losses that cannot be covered in other ways