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What is a limited liability company?
A limited liability company (AS) is the most common form of company formed by one or more founders. Within an AS, ownership and responsibility are shared in a structured way. That means that as the owner of a limited liability company, you have limited personal liability for the company's debts - that is, your personal wealth is protected if the company were to get into financial difficulties. It's like a corporate structure with a built-in safety net.
Differences between different types of company structures
Now that we understand what an AS is, how do the other common forms of company work?
Sole proprietorship: A sole proprietorship is a form of company in which one person conducts the business alone. The company and the owner are the same legal entity, and the owner is personally liable for the debts of the company. It is a simple and flexible form of company, but it lacks tax advantages and can be risky if the business goes bad.
Responsible company: A responsible company is a form of corporation in which two or more people conduct business together. Each participant is personally responsible for the debts of the company, and there is no restriction on its ownership. It is a good corporate form of partnership, but is similar to sole proprietorships in the absence of the tax protection that a limited company can offer.
Are you unsure whether to start a responsible company, sole proprietorship or limited company? Take into account that sole proprietorships and responsible companies entail more complex accounting and management requirements. While these two options give you complete personal ownership and control, it also implies a greater personal responsibility for the company's debts. The difference in taxation and legal aspects is also something to consider when choosing the right company structure for your needs.
Step by Step: How to Start a Limited Liability Company
So, now it's time to dive into the details and find out exactly how to start a limited liability company step by step. Remember that good preparation is the key to success, so let's get started on your journey.
Step 1: Preparations
Before you plunge into an adventure with a limited liability company, start by preparing. The first step is to open a business account with your bank. Here you deposit the initial capital of at least NOK 30,000. Also, make sure you have a strong and memorable company name ready.
Step 2: Register the Limited Liability Company
Visits altinn.no to start your business. Everything from the actual registration of the company, the F-tax and VAT registration to the registration of yourself as an employer is handled here. The registration fee costs a few hundred crowns if you use the digital service, a little more expensive otherwise. During this process, you create the incorporation document that contains information about the founders, the number of shares per stapler, and share prices.
tips: In this step, you can also secure all the necessary permits you need to operate your limited liability company. Depending on the type of business you run, it may vary whether permits are granted locally, regionally or nationally, but in general, the municipality can be a good source for information on this.
Step 3: Create the Statutes
The bylaws act as a game rule book for your company. They specify the type of business, address, minimum and highest share capital, the place of annual general meeting and how future notices should be sent. Here it is important to make sure that they are clear and consistent with the goals of your company.
Step 4: Stock Deposit and Registration
Now it's time to subscribe and pay for the shares. Typically, all shareholders pay the same price per share, but there is flexibility to set different prices if desired. The payment is made by depositing money into the bank account of the company according to the bank confirmation.
Step 5: Register the real copyright holder
Within four weeks after the registration of your limited liability company, you must declare who the real rights holder is. This means reporting who controls the company through ownership stakes or the right to appoint or remove more than half of the board members.
tips: There may be several real copyright holders.
Step 6: Business Insurance
To protect your business from unforeseen costs, it is wise to take out business insurance policies. This includes protection against damage that your company may inflict on others, insurance against property damage, business interruption, and even insurance policies related to collective agreements if you have employees.
With these steps in place, you are ready to start your limited liability company and enter the business world with confidence.
Is it possible to start a limited liability company without capital?
Absolutely, it's possible! You can get started with minimal financial resources. Here are some alternative financing options to consider:
Crowdfunding: Through platforms such as Kickstarter or Indiegogo, you can raise capital from a wide audience that believes in your idea.
Business Angels: Seek support from investors who are willing to invest in your company in exchange for equity stakes.
Personal Loans: Consider using your own savings or taking out a personal loan to fund the start-up capital.
Bank loans: Contact your bank to discuss the possibility of obtaining a business loan to finance the start-up costs of the company.
Bootstrapping: Try to minimize costs by using your own resources and working from home at first.
Outsourcing: Use remote services and freelancers instead of hiring full-time staff to cut costs.
With the right strategy and creativity, you can start a limited liability company even if you have limited capital resources. It is important to plan thoroughly and consider the various financing options that best suit your situation and business idea.
Costs of starting a limited liability company - budget and expenses
When planning to start your own business, it is important to have a clear overview of the costs that may arise. Here we give you an overview of the most common costs and tips on how to create a realistic budget.
The most common costs of starting a limited liability company include:
Registration costs: Initially, you will have to pay fees to register your limited company, usually a few dollars, but it may depend on the company.
Start-up capital: This is not a direct cost in itself, but a limited company requires an initial capital of at least NOK 30,000, which constitutes the share capital of the company.
Premises and equipment: Depending on your business, you may need to rent office space, buy equipment, or invest in warehouse space.
Employees: If you plan to hire staff, pay attention to labor costs and employer fees.
Marketing and advertising: Promoting your business can require a significant budget for advertising, web design and marketing campaigns.
Here's how to create a realistic budget:
Identify and prioritize costs: Carefully review all potential expenses and categorize them to get a clear overview. Focus on the necessary costs that are critical to getting your business rolling.
Measurable: Make your budget measurable by setting specific goals and time frames to follow cost trends.
Flexibility: Be ready to adjust your budget if the need arises. It is important to be flexible and adapt to changes!
A realistic budget is key to keeping control of your costs and ensuring that your limited liability company is sufficiently financially stable to flourish.
Grow your limited company with a business loan from Qred
Once your AS is up and running and you are looking for financing opportunities to grow your business, Qred can be your trusted partner. Qred offers business loans from NOK 100,000 to 5 million that can help you invest in new equipment, increase your marketing or expand your business. With a simple application process, you can access capital quickly and easily - if everything looks good, you can even get the money in the account on the same day!
Frequently Asked Questions About Starting a Limited Liability Company
How much money is required to start a limited liability company?
To start a limited liability company, you need NOK 30,000, but it does not necessarily have to be cash - you can use property or other values to reach this amount.
Can you start a limited liability company all by yourself?
Yes, you can start a limited liability company all by yourself as sole owner and CEO if you wish. There is no requirement to have other owners or directors.
Do you have to collect wages from a limited company?
No, you are not required to withdraw wages from a limited liability company. You can choose to withdraw wages when the company has sufficient funds, or let the profits remain with the company and use it for growth.
How long does it take to open an AS?
The time it takes to open a limited liability company can vary, but normally you can expect the process to take a few weeks. The registration and processing of necessary formalities may also vary in time.
Is your company in need of more capital? Apply today!
