Businesses are generally not established for the short term; the goal is operation, growth, and development. No one starts a company expecting to shut it down after a few years. In practice, however, it may happen that a company’s operations become redundant, it is no longer needed, or the owners—due to market reasons or international restructuring—decide to exit the market. In such cases, the company must be terminated in an orderly manner.

Forms of Voluntary Dissolution

If the company is not insolvent—meaning it can fulfill its obligations—voluntary dissolution provides the legal framework for termination. A faster and simpler version of this is the simplified voluntary dissolution, which in many cases is an efficient alternative to the traditional procedure.

Simplified Voluntary Dissolution

The essence of simplified voluntary dissolution is that the company ceases to exist without a legal successor, within a shorter timeframe and with less administration, while still ensuring that creditors are settled and assets are distributed. The ultimate goal is the same in both procedures: collecting the company’s receivables, settling its liabilities, and distributing the remaining assets among the owners.

What Is the Difference Between Simplified and Traditional Dissolution

The difference lies mainly in the procedure itself. Traditional voluntary dissolution is typically longer, requires the appointment of a dedicated liquidator, and can take years. In contrast, simplified voluntary dissolution does not require a separate liquidator: the company’s executive officer (managing director) performs these duties. Administration is also simpler, as notifications are primarily made to the tax authority (NAV), which forwards the information to the company court.

Simplified Dissolution Without a Lawyer

Another important practical difference is that simplified voluntary dissolution does not require the involvement of a lawyer. In most cases, the process can be handled by an accountant, who submits the necessary notifications to the tax authority and prepares the related accounting documentation.

Conditions for Simplified Voluntary Dissolution

However, simplified voluntary dissolution can only be applied under certain conditions. The most important requirements are that the company must not be insolvent, must not be subject to mandatory audit, and the procedure must be completed within 150 days from the starting date. If the process is delayed or, for example, a disputed creditor claim arises, the procedure must be converted into a standard voluntary dissolution.

Process of Simplified Voluntary Dissolution

The process begins with a decision by the owners, in which the starting date of the dissolution is determined. This is followed by notification to the tax authority, after which the actual settlement phase begins: collecting receivables, settling liabilities, and preparing the necessary reports and tax returns. Creditors are also given the opportunity to register their claims, typically within a 40-day period.