What closing means: the capital increase (kapitalforhøyelse)
Nobody sells your investors anything at a closing. Their money buys shares that do not yet exist. The company creates them by a corporate act under the Companies Act (aksjeloven) chapter 10, and until that act is complete and registered the round is only an agreement, and the company’s cash should be planned from the registration date.
Buying existing shares from a shareholder is a purchase, governed by the Sale of Goods Act (kjøpsloven), with a counterparty to claim against. The Supreme Court rescinded a share purchase for a material defect where an undisclosed claim of more than two million kroner surfaced after completion.
Subscribing for new shares in a share issue (emisjon) has no seller, so those statutory remedies have nothing to attach to. The warranties and founder guarantees in the investment agreement replace them, which is why the investors will ask you to sign them.
The closing sequence, step by step
Run the closing from this list, with a date against every step, and send it to every subscriber so nobody is surprised by the payment deadline.
| # | Step | What is produced, and by whom | Deadline and statute |
|---|---|---|---|
| 1 | Board proposal | The board puts a proposal to the general meeting with the supporting documents, and adds a board report where any contribution is in kind. | Before the meeting is called (aksjeloven § 10-3; § 10-2 for a contribution in kind) |
| 2 | General meeting (generalforsamling) resolution | The shareholders resolve the increase and the new share-capital figure in the articles, in minutes signed as § 5-16 requires. | Two thirds of the votes cast and of the capital represented (§ 5-18, § 10-1) |
| 3 | Setting aside pre-emption | The same shareholder resolution disapplies existing shareholders’ pre-emptive right, so the incoming investors can subscribe. | Same two-thirds majority (§ 10-4, § 10-5) |
| 4 | Subscription (tegning) | Each subscriber signs, either in the minutes themselves or on a separate subscription document or list that reproduces the resolution and names subscriber, share count and price. | By the subscription deadline set in the resolution (§ 10-7) |
| 5 | Payment | Each subscriber pays the subscription amount into the company’s share-issue account. | By the payment deadline in the resolution; the increase cannot be registered until contributions are received in full (§ 10-9) |
| 6 | Confirmation of payment | An auditor, a financial institution, a lawyer or an authorised accountant confirms in writing that the contribution has been received — an auditor only, where the contribution is in kind or by set-off. | Before filing (§ 10-9 second paragraph, cf. § 2-18 second paragraph) |
| 7 | Non-cash contribution, if any | The board reports on what is being contributed, and the auditor confirms the valuation. | Valuation dated no earlier than four weeks before the general meeting’s decision (§ 10-2, cf. § 2-6) |
| 8 | Registration | The board, or an authorised filer, notifies the increase to the Register of Business Enterprises (Foretaksregisteret) through the coordinated register notification in Altinn. | Within three months of the subscription deadline; miss it and the resolution lapses, subscribers are released and contributions repaid (§ 10-9) |
| 9 | Legal effect | The new shares confer shareholder rights. | From registration, unless the resolution provides otherwise; ordinary shareholder rights no later than registration (§ 10-11) |
| 10 | Share register (aksjeeierbok) update | The board records the new shareholders and their holdings in the register. | Without delay after registration (§ 4-5) |
Registering the capital increase (step 8) costs nothing, because a capital increase is not among the changes Brønnøysundregistrene charges for. The filing costs time instead: registration is not instantaneous, so build the wait into the closing plan.
The fee-bearing changes in Foretaksregisteret are a closed list (change of partners, change of a liability share, retirement as a partner, merger, demerger and relocation plans, capital reduction, change of business name including on conversion, and prospectuses), and those currently cost roughly NOK 1,300 digitally and NOK 2,500 on paper, with the exact amounts on Brønnøysundregistrene’s fee page.
The resolution must state, at minimum, all of the following, and a resolution missing one of them is a resolution you will be asked to redo:
- The amount of the increase.
- The nominal value and subscription price of the new shares.
- Who may subscribe, and any deviation from the pre-emptive right (resolved under § 10-5).
- The subscription and payment deadlines.
- The rights attaching to the new shares (§ 10-1 second paragraph).
Who holds the list depends on the round. Settle it before the board proposal is drafted, because the list is what the closing runs on.
- First raise. The sequence is new to you and to some of your angels. Fill in the dates before the general meeting is called, and send the table to every subscriber with the share-issue account details.
- Second raise. Read the existing shareholders’ agreement for consent and pre-emption requirements on a new issue before you call the meeting. A consent nobody asked for is a finding the new investors’ diligence will make.
- With a lead. Agree at term-sheet stage whose counsel holds the closing list, and who confirms payment.
- Without a lead. You hold the list. Name the person with Norwegian electronic ID who will file, and confirm the bank knows a share-issue account is coming.
The document set on the table
Have every document in this set drafted before the general meeting, because the meeting, the subscription and the payment can then run in the same week.
| Document | What it does | Who signs |
|---|---|---|
| Board proposal and board minutes | Puts the increase to the meeting and records the board’s decisions | The board members taking part |
| Notice of the general meeting and the minutes | Convenes the meeting and proves the resolution exists on the agreed terms | The chair of the meeting and at least one other person the meeting elects from those taking part (§ 5-16) |
| Updated articles of association (vedtekter) | Carries the new share capital figure | Adopted by the same resolution; filed with the notification |
| Subscription agreement (tegningsavtale) or subscription list | Records who subscribed, for how many shares, at what price, on which resolution | Each subscriber |
| Board report on a non-cash contribution | Values what is being contributed instead of cash | The board, confirmed by the auditor |
| Payment confirmation | The statutory confirmation without which the increase cannot be registered | The auditor, bank, lawyer or authorised accountant |
| Investment agreement with the warranty catalogue | Holds the founder guarantees that replace the buyer remedies a subscriber does not have | The company, the founders and the investors |
| Shareholders’ agreement and accession declarations | Binds incoming investors into the existing agreement and the existing shareholders to the new one | All shareholders, including the new ones |
| Coordinated register notification | Effects the registration | Signed with Norwegian electronic ID by the board or an authorised filer |
Deadlines and the four traps
The three-month rule. The notification must reach Foretaksregisteret within three months of the subscription deadline. Missing it ends the round. The resolution lapses, the subscribers are released, the contributions go back, and you run the whole sequence again from step 1.
Paying before there is anything to pay for. Money transferred before the resolution exists cannot be a subscription. It is a loan to the company or an unexplained deposit, it complicates the confirmation the register requires, and an eager investor is better told to wait for the resolution.
Spending the money before registration. Aksjeloven does not expressly forbid the company from using cash paid in. The confirming bank certifies the funds, though, and in practice holds them on a blocked share-issue account (emisjonskonto) until the registered increase is shown. Assume the money is available from the registration date, and plan payroll and supplier payments from that date rather than from signature.
Conditions precedent left unticked. Everything the investment agreement made a condition of completion (assignments executed, contracts signed, a diligence finding cleared) is checked at this table. Track them on the same list as the corporate steps, or the closing stops for a document somebody assumed was done.
Board changes and amended articles agreed as part of the round are registrable changes. They belong in the same coordinated register notification as the capital increase (foretaksregisterloven § 4-2, which requires any change in a registered item to be notified without undue delay).
Immediately after registration
Do these in the week after registration, while the round is still on everyone’s desk. The beneficial-owner update and the shareholder register statement carry deadlines of their own.
- Update the share register and send each investor confirmation of their holding. The register is where shareholding is recorded (§ 4-5).
- Update the register of beneficial owners if any investor now owns or controls more than 25 per cent of the shares or votes, or can appoint or remove a board majority.
- Put the round into the next shareholder register statement (aksjonærregisteroppgaven, RF-1086), due to Skatteetaten by 31 January for the preceding year and covering share issues, new shareholders and transfers. Where an investor is claiming the start-up investment deduction, the qualifying contribution has to be reported with the correct event type in that same statement, so put it on the closing checklist.
- Convene the first board meeting in the new composition, and hold the kick-off with the new owners while the diligence conversations are still fresh. The working relationship is set in the hundred days after registration.