A buyer needs to understand what makes a business valuable and whether that value will survive the acquisition. A customer relationship, a lease, a software licence or a key employee can matter more than the length of the sale agreement. This guide is for buyers of a Norwegian business, whether the deal is a share purchase or an asset purchase.
Begin with the commercial assumptions
Legal due diligence should therefore begin with the buyer’s commercial assumptions. Use the review to decide whether to proceed, what to pay and which risks the agreement should address.
Start by defining what you are buying
In a share purchase, the buyer acquires shares in the company. The company continues as the same legal entity, with its existing rights and obligations. The review must therefore consider historical liabilities as well as future opportunities.
In an asset purchase, the parties identify the business assets, rights and obligations intended to transfer. Check the transfer requirements for each important contract, licence and asset. As a starting point, a contract party cannot transfer its obligations to a new party without the counterparty’s consent, so identify the contracts that require consent. An asset structure does not, by itself, settle questions about employees, third-party consents or statutory responsibilities.
Compare the alternatives with legal, tax and accounting advisers before committing to a structure. The seller’s preferred arrangement may differ from the buyer’s, and a headline price can conceal important differences in what each proposal includes.
Focus the investigation on the business model
Ownership and authority: verify the seller’s title to the shares or assets and the approvals needed for the sale, including any consent and pre-emption rules in the target’s articles of association.
Customers and suppliers: review dependency, termination rights, disputes and change-of-control or transfer clauses.
Finance and security: identify borrowing, guarantees and security that may need to be released or refinanced.
People: examine employment terms, incentives, pensions and any proposed organisational changes.
Technology and intellectual property: establish ownership, licence terms and reliance on contractors.
Premises and operations: assess leases, permits, material compliance issues and claims.
Ask for supporting evidence. A statement that all software belongs to the company is less useful than the relevant development and assignment agreements. A statement that a customer will remain is less useful than its contract and any required consent.
Review employees before planning integration
Where a transaction transfers an undertaking or part of it to a new employer, Chapter 16 of the Working Environment Act (arbeidsmiljøloven) applies. The employer’s rights and obligations under existing employment contracts and relationships transfer to the new employer (Section 16-2), and the transfer is not, in itself, a ground for dismissal by either the old or the new employer (Section 16-4). Employees can object to their employment being transferred (Section 16-3), and both employers must inform and consult the employee representatives as early as possible (Section 16-5).
In a pure share purchase, the employer remains the same company, and the transfer rules will often not be triggered by the share sale itself. Sections 16-2 and 16-4 do not apply to a transfer from a bankruptcy estate (Section 16-1 (2)). Determine which rules apply to the proposed structure and timetable.
Do not build the acquisition budget on an assumption that employment terms can be replaced at completion. Ask specifically about arrangements that may exist outside the written contracts, including established benefits and working practices.
If the parties want to agree that neither will recruit the other’s employees, note that such recruitment clauses are generally prohibited. They may be agreed during negotiations about a transfer of undertaking and apply for up to six months after negotiations end without agreement, or from the transfer for up to six months if all affected employees have been informed in writing (Section 14 A-6).
Identify approvals that could delay completion
Norwegian merger control can require notification to the Norwegian Competition Authority (Konkurransetilsynet) before a transaction is completed (Section 18 of the Competition Act). A notifiable transaction must not be implemented before the Authority has concluded its review, unless an exemption is granted (Section 19). Turnover thresholds and the acquisition of control must be assessed for the particular deal.
The Authority can also order notification of transactions below the thresholds, within three months of the final agreement or the acquisition of control, whichever comes first. The analysis should happen before the parties agree an unconditional completion date.
Also ask whether the particular business, its licences or its assets require sector-specific approvals. A foreign buyer should obtain a transaction-specific assessment of any ownership or security restrictions relevant to the target.
Turn findings into terms that address the risk
A due diligence report should explain what each material finding means for the deal. A missing consent might become a condition to completion. A documented historical exposure might call for a specific indemnity. An uncertain revenue assumption might affect the price or the payment structure.
Distinguish a warranty, which allocates risk by reference to a statement about the business, from a practical step needed to fix a problem. Where money may be claimed after completion, assess the seller’s ability to pay and whether escrow, retention or other security should be negotiated.
Agree how the buyer’s knowledge and the seller’s disclosures affect contractual claims. Review liability limits, claim deadlines and notice requirements together; an apparently broad protection can be difficult to use if the procedure is unclear.
Plan completion and the first weeks of ownership
Prepare a completion checklist identifying each document, payment, release and approval, with a responsible person and a clear order of events. Then plan the transfer of access, records, customer communications and operational responsibilities.
Before signing, bring the heads of terms, ownership structure, funding plan and available due diligence material to your advisers.
Related reading
Legal framework and official guidance
Working Environment Act Chapter 16 (transfer of undertakings) and Section 14 A-6
Altinn: The private limited company as a separate legal entity
Norwegian Labour Inspection Authority: Transfers of undertakings
Norwegian Competition Authority: Merger and acquisition control
How we can help
Advokatfirmaet Sterk AS (org. no. 931 556 584, St. Olavs plass 3, 0165 Oslo, advokats.no) advises buyers and sellers of Norwegian businesses on due diligence, transaction agreements and completion. If you would like us to look at your situation, you can contact us. Information about our fees is available at advokats.no/priser.
This article provides general information as of 29 October 2026 and is not legal advice for your specific situation.
