General partnerships (ansvarlige selskaper, ANS) are a distinct company form in Norwegian law. Their defining feature is that the partners are directly, personally, jointly and severally liable for the partnership’s obligations. This article explains key legal aspects of general partnerships, focusing on capital structure, decision-making, transferability and the participants’ ownership rights, and is written for partners and founders choosing a company form.
Capital Structure in General Partnerships
Absence of Contribution Requirement
In contrast to limited liability companies, where the share capital must be at least NOK 30,000 (Section 3-1 of the Limited Liability Companies Act), the Partnerships Act does not require partners to make capital contributions. Partners may, however, agree on capital contributions among themselves.
Free Disposition of Company Capital
A key difference from limited liability companies is that there are no rules regarding the restriction of company capital in general partnerships. This is related to the form of liability:
partners are personally, jointly and severally liable for the partnership’s obligations (see the definition in Section 1-2 first paragraph letter a of the Partnerships Act);
in principle, the entire equity can be returned to the partners; and
the Act does not restrict distributions in the way the Limited Liability Companies Act does, but the partners remain liable for the partnership’s debts.
Creditor protection is therefore not tied to capital restrictions in the company, but to the partners’ personal and unlimited liability.
Decision-Making Processes in General Partnerships
Unanimity Principle
In general partnerships, the main rule is that decisions in the company meeting require approval from all participants. This unanimity rule follows from the Partnerships Act unless the partnership agreement provides otherwise, and reflects the company’s character as a personal company where participants have personal liability.
The unanimity principle gives each participant veto power against company decisions, which reflects the strong position each participant has in the company. This contrasts with limited liability companies, where decisions are normally made by majority vote.
Transferability of Company Shares
Main Rule of Non-Transferability
Under Section 2-28 of the Partnerships Act, a partnership share cannot be transferred to a new owner without the consent of all the other partners, unless otherwise agreed. This limitation on transferability reflects that general partnerships are personal companies where the participants’ identities are considered a fundamental founding premise.
The non-transferability is directly related to the form of liability – when participants have unlimited liability for the company’s obligations, the identity of the other participants matters, especially regarding their financial solvency and personal qualities.
Consequences for the Share’s Character as a Property Right
While shares in limited liability companies typically have value as transferable property rights, this does not apply to the same extent for shares in general partnerships. The limited transferability means that the share’s value is primarily tied to the participants’ right to distributions from the company and not to the possibility of selling the share at a profit.
Alternatives to Transferability
The partners may agree that shares shall be transferable. Such an arrangement should be set out in the partnership agreement and is an exception to the main rule.
Change of Ownership on Grounds Other Than Transfer
Inheritance and Marital Property Division
The same considerations that argue against transferability of shares also argue against change of ownership on other grounds:
unless the partnership agreement provides otherwise, heirs do not automatically step into a deceased partner’s position;
the Partnerships Act contains rules on the redemption of the deceased partner’s share; and
similar considerations apply to a spouse who takes over the share in undivided possession of an estate or is allocated the share in a division of matrimonial property.
Pledging and Creditor Attachment
Even though the share as a main rule cannot be transferred, this is not in itself an obstacle to:
voluntary pledging of the share (although the legal basis for pledging has been debated);
enforcement against the share by a partner’s personal creditors; or
bankruptcy: both the partnership and individual partners can be declared bankrupt or be subject to other insolvency proceedings.
The partnership is considered a separate bankruptcy subject, with the consequence that company creditors, in competition with the participants’ separate creditors, have priority right to company assets.
Participant’s Ownership Rights
Control Over Company Assets
The ownership rights over a general partnership’s assets must be resolved by the rules that apply to the management of the company. It is the company – through the company meeting – that exercises ownership rights over the company’s individual assets (e.g., use, sale, pledging).
Participants in general partnerships are barred from controlling their shares in the individual assets in their own interest. This is not significantly different from the situation in limited liability companies, but the justification is more practical – individual control would be impractical.
Relationship to the Partners’ Management Authority
The participants’ lack of right to control the company’s individual assets does not conflict with the authority that each participant may have under the Partnerships Act to manage the partnership. Important points here are:
such authority is exercised on behalf of the partnership and in its interest; and
the authority is not limited to the participant’s own share in the partnership’s assets.
Control Over the Net Share
Although the participant cannot control the company’s individual assets, each participant has control over their claim to payments from the company (the net share). This is an independent property item that the participant can dispose of.
Mutual Right of Deduction
A particular question that arises in connection with the participants’ ownership rights is whether the individual participant can demand that the company’s assets should primarily cover the company’s obligations. This can become relevant in several situations:
when a participant is to be redeemed;
when the partnership is to be dissolved; and
when the partnership is declared bankrupt.
Legal literature and practice assume that each participant in a general partnership has such a mutual right of deduction with respect to the company’s obligations. This right can also be asserted against the other participants’ separate creditors.
Comparison with Limited Liability Companies
Aspect | General partnership | Private limited company (AS) |
|---|---|---|
Capital contribution | No statutory requirement | Minimum share capital NOK 30,000 |
Liability | Personal, joint and several | Limited to the share contribution |
Capital restrictions | No statutory restrictions on distributions | Rules on restricted equity |
Decisions | Unanimity as the main rule | Majority decisions as the main rule |
Transferability | Requires the consent of all other partners, unless otherwise agreed | Transferable, but unless the articles provide otherwise, transfers are subject to the company’s consent and the other shareholders’ pre-emption rights |
Personal element | Strong | Primarily capital-based |
How we can help
We assist partners and businesses with the choice of company form, partnership agreements, changes in ownership and disputes between partners. You can read more about the firm at advokats.no or get in touch through our contact page.
This article provides general information as of 29 October 2026 and is not legal advice for your specific situation.
