11) Unequally divided partial liquidation

Company X before partial liquidation: (Ordinary shares only)

Share capital: NOK 1,000,000

Number of shares: 1,000

Nominal value: NOK 1,000

Company X after partial liquidation:

Share capital: NOK 500,000

Number of shares: 500

Nominal value: NOK 1,000

Factual information:

Company X has two shareholders, shareholder A and shareholder B, each of whom owns 50 percent.

In the middle of June, the board of directors decides that 500 shares are to be redeemed. For each share that is redeemed, a consideration of NOK 1,000 is distributed. Both shareholders will redeem shares, but the holdings will be different after the redemption.

Shareholder A redeems 100 shares, while shareholder B redeems 400 shares. To determine whether the partial liquidation should be reported as an equal division or unequal division, it is necessary to consider the holdings before and after the partial liquidation: 

Shareholder A

Shareholder B

Before the liquidation: 500

Before the liquidation: 500

Liquidates: - 100

Liquidates: - 400

Has left = 400

Has left = 100

As a percentage of the holding:
400/500 * 100% = 80%

As a percentage of the holding:
 100/500 * 100% = 20 %

Shareholder A’s holding has increased from 50% to 80%, while shareholder B’s holding has decreased from 50% to 20%. We therefore have an unequal division. If one or more shareholders in a company have their holding reduced, the rule is that all shareholders who redeem shares must be taxed on the realisation.

Reporting at company level, under item 11:

Event type: Unequally divided partial liquidation
Quantity deleted: 500
Quantity after: 500
Nominal value: NOK 1,000
Premium deleted:
Total consideration: NOK 500,000
Time: Date

In the “Total consideration/Paid from paid-up capital” field, it is important to note that the company must report the total consideration in connection with the unequally divided partial liquidation. This is because unequally divided partial liquidation must be treated as realisation.

Reporting at shareholder level, under item 25, shareholder A:

Transaction type: Unequally divided partial liquidation
Number of disposals: 100
Total consideration/Paid from paid-up capital NOK 100,000
Time: Date

Reporting at shareholder level, under item 25, shareholder B:
Transaction type: Unequally divided partial liquidation
Number of disposals: 400
Total consideration/Paid from paid-up capital NOK 400,000
Time: Date

 

For correct completion, see the examples of correctly completed shareholder register statements:

 RF-1086 Completion for unequally divided partial liquidation. Main form and sub-form