10) Equally divided partial liquidation

Facts:

Company X has two shareholders, A and B, with an equal number of shares in the company.

Both shareholders wish to redeem shares, and the number of shares and share capital in the company will then be halved. Each shareholder receives NOK 100,000 (NOK 2,000 for each redeemed share).

Company X before partial liquidation:

Share capital NOK 200,000

Number of shares 200

Nominal value NOK 1,000

Paid-up share capital NOK 200,000

Company X after partial liquidation:

Share capital NOK 150,000

Number of shares 150

Nominal value NOK 1,000

Paid-up share capital NOK 150,000

Solution:

Equal division is carried out, and each shareholder will be left with the same holding that he or she had before redemption of the shares. In connection with payment to the shareholders, payments that exceed the paid-up capital will be treated as a dividend.

In order to handle this correctly, the company must have a complete overview of the amount of paid-up capital. In the case of equal division, the consideration will consist of either the repayment of paid-up capital or a dividend. In our example, each of the shareholders has paid-up capital of NOK 25,000 for his or her redeemed shares. The distribution will therefore result in each shareholder being taxed for a dividend of NOK 75,000.

Under item 11, “Total consideration/Paid from paid-up capital”, the company must select the transaction type “equally divided partial liquidation” and enter NOK 50,000 as “Paid from paid-up capital”. The corresponding procedure is followed at shareholder level under item 25, but in this case with NOK 25,000 for each shareholder.

Paid amounts which exceed the paid-up capital amount will be treated as a dividend and reported in the normal way under item 8 at company level and under item 21 at shareholder level. In our example, NOK 150,000 must be entered under item 8 and NOK 75,000 must be entered under item 25 for each of the shareholders.

Special remarks:

Partial liquidation and dividend distribution must be registered with different times, even if they actually occur at the same time.

For correct completion, see the examples of a correctly completed shareholder register statement.

 RF-1086 Completion for partial liquidation equal division. Main form and sub-form