Articles of association in a Norwegian private limited company (AS): key considerations

1. Should the company have different share classes?
The general rule under the Norwegian Companies Act is that all shares carry equal rights. The articles of association may, however, provide for different classes of shares with different rights.

Different share classes may, for example, be used to distinguish between:

Voting rights: A share class may have limited or no voting rights at the general meeting. This may be relevant where certain owners are intended to retain greater influence over the company while other investors participate primarily through their economic interest.

Dividends and other distributions: Different share classes may have different economic rights. Preference shares may, for example, give one class priority to dividends or other distributions.

Other rights and restrictions: Different classes may also be subject to different transfer restrictions or other rights relevant to the ownership and governance structure, within the limits of the Companies Act.

Share classes can therefore provide considerable flexibility when structuring ownership, governance and financing.

The rights attached to each class should be described clearly in the articles. Particular care should also be taken when subsequently changing rights attached to an existing share class, as special majority requirements may apply.

2. Should there be restrictions on who can acquire shares?
For a Norwegian AS, the statutory starting point is that an acquisition of shares requires the company's consent unless the articles provide otherwise.

Consent is normally given by the board. The board may not refuse consent unless there is a justifiable reason for doing so.

The articles can be used to adapt this regime to the needs of the company.

Restrictions may, for example, be relevant in:

• family-owned companies
• employee-owned companies
• joint ventures
• professional or industry-based ownership structures
• companies established for cooperation between a defined group of participants.

The articles may also require shareholders or acquirers to possess specified characteristics.

Alternatively, the company can take the opposite approach and provide that its shares may be transferred without company consent.

The appropriate solution depends on the intended ownership structure. A company seeking external investment or contemplating a future sale may, for example, place greater emphasis on transferability than a closely held joint venture.

3. Should the shareholders have pre-emption rights?
The statutory starting point for a Norwegian AS is that the other shareholders have a pre-emption right when shares change ownership.

The articles may modify or remove this regime.

A company may, for example, decide that no statutory pre-emption right should apply in order to make transfers easier. It is also possible to adapt aspects of the statutory procedure, including the rules governing the exercise of the right and determination of the redemption price, within the limits of the Companies Act.

Conversely, the owners may want a more extensive transfer regime.

One issue that sometimes arises in corporate structures is a change of control in a shareholder. If Company A owns shares in a Norwegian AS and the ownership of Company A changes, there has not merely for that reason been a transfer of the shares held by Company A in the Norwegian AS. The statutory pre-emption regime will therefore not automatically address such a change of control.

If the owners want changes of control at shareholder level to have specific consequences, this must be regulated separately. Depending on the intended effect, such provisions may also be appropriate for a shareholders' agreement.

4. Who should have authority to sign for the company?
Under the Companies Act, the board represents the company externally and has authority to sign on its behalf.

Where the board consists of several members, relying solely on the board's collective authority may be impractical in the day-to-day operation of the business.

Authority to sign for the company may therefore be given to individual board members, the managing director or named employees. Such authority may also be set out in the articles.

For example, the company may provide that two board members jointly have signing authority or that the managing director has separate signing authority.

This should be distinguished from the managing director's statutory authority to represent the company in matters falling within the ordinary day-to-day management.

The appropriate signing arrangements will depend on the company's size, organisation and internal control requirements.

5. Can the articles simplify corporate procedures?
The articles can also be used to make certain corporate procedures more efficient.

For example, the articles may provide that documents concerning matters to be considered by the general meeting can be made available on the company's website instead of being sent automatically to every shareholder. A shareholder will still be entitled to request that the documents be sent to them.

The articles may also allow shareholders to cast votes in writing, including electronically, before the general meeting.

These provisions can be useful where the company has a larger number of shareholders or shareholders located in different countries.

6. Articles of association or shareholders' agreement?
Not every ownership or governance arrangement should necessarily be placed in the articles.

The articles form part of the company's corporate framework and may have legal effects beyond the shareholders who originally agreed them. A shareholders' agreement, by contrast, is generally a contractual arrangement binding only on its parties and does not have the same direct corporate effect.

This distinction can be important.

Matters concerning the company's formal share structure, share classes and certain transfer restrictions will often need to be reflected in the articles if they are to have the intended corporate effect.

Other matters may be better suited to a shareholders' agreement, for example:

• detailed governance arrangements between particular shareholders
• reserved matters and voting undertakings
• funding obligations
• information rights
• mechanisms dealing with future transfers or exits
• other contractual rights and obligations between the owners.

In companies with more than one significant shareholder, the articles and shareholders' agreement should normally be considered together. Inconsistent provisions can create uncertainty about both the corporate and contractual position.

7. The Companies Act sets limits
The matters discussed above are examples rather than an exhaustive list.

The Norwegian Companies Act contains mandatory rules that limit what can be included in the articles. Particular majority requirements may also apply when existing articles are amended, especially where changes affect rights attached to existing shares or introduce new restrictions on shareholders.

It is therefore important to consider not only what the owners want the articles to say, but also whether the proposed provisions are legally effective and produce the intended result.

For international groups and investors, the articles should also be considered in the wider context of the ownership structure, any shareholders' agreement, financing arrangements and the governance requirements of the Norwegian company.

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Originally published 13 October 2024. Last updated 16 August 2026.