Report from Norway: Redemption through Demergers

Abstract:     
A recent judgment from the Norwegian Supreme Court concerning the demerger of a private limited liability company provides some insight into the Supreme Court's understanding of what kind of transactions between a company and its shareholders fall within the scope of the legal term 'demerger' as contained in the Norwegian Private and Public Limited Liability Companies Acts. The crux of this case is whether the demerger rules apply to a case where the only objective of the new company (the 'spin-off' company) is to act as a vehicle for transferring money to a shareholder that wishes to withdraw from the original company. The significance of falling within the scope of the 'demerger' rules is that legal demergers entail tax exemption.

Number of Pages in PDF File: 7

Keywords: Limited liability companies, demerger, tax exemption, Norwegian company law, EU company law, Sixth Companies Directive

Accepted Paper Series