Pre-emption rights on transfers of shares in Norwegian private limited companies (AS)

Who has the statutory pre-emption right?
The statutory right belongs to the company's shareholders.

The purpose of the regime is, among other things, to allow existing shareholders to prevent outsiders from entering the company and to preserve their relative ownership and influence.

If persons other than shareholders are to have pre-emption rights, this must follow from the articles of association or another legal basis.

Whether a person is entitled to exercise shareholder rights must be assessed under the Companies Act. A purchaser of shares can normally exercise shareholder rights once the acquisition has been entered in the shareholder register, or once the acquisition has been notified and sufficiently documented without being prevented by statutory or articles-based transfer restrictions.

Following a transfer, the seller may continue to exercise shareholder rights only to the extent those rights have not passed to the purchaser.

This distinction can therefore affect who is entitled to exercise a pre-emption right in connection with another transfer.

How are the shares allocated if several shareholders exercise the right?
As a starting point, all shareholders have equal priority to acquire the transferred shares.

Where several shareholders exercise the pre-emption right, the shares are allocated proportionally according to their existing shareholdings.

If the company has different share classes, shareholders holding shares in the same class as the transferred shares have priority over shareholders in other classes.

Any shares that cannot be allocated proportionally are distributed by drawing lots.

The articles of association may provide for a different arrangement.

When is the pre-emption right triggered?
Under the statutory regime, the pre-emption right arises when the shares have changed ownership.

It is therefore normally a post-transfer right rather than a requirement that the seller first offer the shares to the existing shareholders before agreeing a transfer.

The statutory right is generally triggered by any form of change of ownership, subject to statutory exceptions. This may include:

• sale
• exchange
• gift
• inheritance
• compulsory sale or other involuntary transfer.

A pledge of shares will normally not trigger the statutory pre-emption right because ownership of the shares has not changed merely by granting the security.

The articles may, however, establish a broader regime, including a right that applies before a contemplated transfer takes place.

Mergers and demergers
Transfers occurring as part of mergers or demergers require particular attention.

The Norwegian Supreme Court considered contractual pre-emption rights in connection with a merger and demerger in HR-2023-1128-A.

The Court held that a transfer of shares resulting from a merger or demerger will, as a starting point, not trigger an agreed pre-emption right because of the principle of continuity applicable to such transactions.

The contractual basis must nevertheless be interpreted in each case. In HR-2023-1128-A, the particular shareholders' agreement was interpreted broadly enough for the pre-emption right to apply despite the merger and demerger.

The effect of a merger or demerger should therefore be assessed separately where the pre-emption right follows from the articles of association or a shareholders' agreement.

Transfers to close family and related parties
The statutory pre-emption right cannot be exercised against certain persons closely connected to the previous owner.

The exemption includes the previous owner's personally closely related persons and relatives in the direct ascending or descending line.

The statutory category of personally closely related persons includes, among others:

• the owner's spouse or a person living with the owner in a marriage-like relationship
• minor children of the owner and certain minor children of the owner's spouse or cohabitant living with the owner
• a company over which the owner or such personally closely related persons have controlling influence.

Parents, grandparents, children and grandchildren are also covered by the separate exemption for relatives in the direct ascending or descending line.

The precise relationship should be checked where the exemption is relevant.

The pre-emption right normally applies to all relevant shares
A shareholder cannot normally exercise the statutory pre-emption right for only part of the shares to which the right applies.

Where several shareholdings are disposed of as part of a connected transaction, whether by the same owner or several owners, the statutory right must be exercised in relation to all the relevant shares collectively.

This rule can be important where a transaction has been structured as several formally separate share transfers but forms part of one connected disposal.

The two-month deadline
When the company receives notice that shares have changed ownership, it must promptly notify the persons entitled to exercise the pre-emption right.

A shareholder wishing to exercise the statutory right must notify the company.

The notice must reach the company no later than two months after the company received notice of the change of ownership.

Where the redemption price has not already been agreed or determined, the shareholder must also within that period take the steps necessary to obtain a binding determination of the price in accordance with the applicable procedure.

Under the statutory regime, the redemption price is based on the fair value of the shares at the time the pre-emption claim is made.

The articles may regulate aspects of the price determination and procedure, subject to the limitations of the Companies Act.

Always check the articles of association
The statutory rules are only the starting point.

The articles of association may:

• remove the statutory pre-emption right entirely
• establish a pre-emption right before the transfer takes place
• give rights to persons other than shareholders
• modify the allocation between shareholders
• regulate the procedure or price determination differently.

The articles should therefore always be reviewed before a share transfer is agreed or completed.

A shareholders' agreement may also contain transfer restrictions, rights of first refusal, pre-emption rights or other mechanisms. These contractual arrangements must be interpreted separately and may have a different scope from the statutory regime.

Companies established before 1 January 1999
A particular transitional rule applies to Norwegian private limited companies established before the current Companies Act entered into force on 1 January 1999.

For such companies, the statutory pre-emption regime applies only if the company's articles contained provisions on pre-emption rights in connection with transfers or other changes of ownership.

It should therefore not automatically be assumed that the ordinary statutory regime applies to an older Norwegian company.

What about Norwegian public limited companies (ASA)?
The position is different for Norwegian public limited companies (ASA).

There is no general statutory pre-emption right on transfers of shares in an ASA. Such a right may instead be established in the articles of association.

The company's legal form and articles should therefore always be checked before assessing whether a transfer is subject to pre-emption rights.

Practical considerations in a share transaction
For a buyer or seller of shares in a Norwegian AS, pre-emption rights should normally be reviewed before signing or completing the transaction.

Relevant questions include:

• Does the statutory pre-emption regime apply?
• Have the articles modified or removed the statutory rules?
• Are there separate rights in a shareholders' agreement?
• Who is currently entitled to exercise the right?
• Will the contemplated transaction constitute a change of ownership?
• Are any related-party exemptions relevant?
• What will the redemption price be if the right is exercised?
• How should the transaction documents deal with the pre-emption process?

Addressing these questions early can reduce the risk that a share transfer is delayed or that the purchaser does not ultimately acquire the shares as contemplated.

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