Illustrasjon av konseptet aksjekapital

What is Share Capital?

Share capital is the total value of the owners' contributions to a limited liability company (LLC) at its start-up. This capital serves as the company's basic financing and a financial buffer.

Share Capital Requirements

To establish a limited liability company in Norway, there is a statutory requirement in the Companies Act to have a share capital of at least NOK 30,000 . This capital does not have to be exclusively cash. It can consist of:

  • Money: Cash deposits into a separate business account.
  • Contributions in kind: Valuables such as machinery, equipment, property or other assets that are relevant to operations.

A combination of cash and in-kind contributions is also common. The value of in-kind contributions must be confirmed by an auditor.

Illustration showing that money and assets make up share capital

The Role of Share Capital

The share capital is linked to the company's shares . The total share capital is divided into a number of shares, each of which is given a nominal value .

Pålydende verdi per aksje = Total aksjekapital / Antall aksjer

It is important to note that even if shares have the same par value, they may have different rights if the company has created different share classes .

This capital will be used to finance operations, whether it is investments in equipment, purchases of goods or covering running costs, before the company itself begins to generate income.

If the company later needs more capital, shareholders can either increase the share capital through a capital increase, lend money to the company without diluting the ownership stakes, or consider modern financing methods such as crowdfunding and other forms of crowdsourcing to raise capital from many small investors.

Risk to Shareholders

As an owner (shareholder), your financial risk in a limited liability company is essentially limited to the share capital you have invested. If the company were to go bankrupt, you cannot normally lose more than your share capital. This is one of the major advantages of the AS company form.

Unlike the risk, the potential return on equity is not limited - shareholders can earn significantly more than their original investment through dividends and appreciation in the value of the shares.

In the accounts, share capital is recorded on the liabilities side of the balance sheet, under "Equity".

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