Trial lecture - time and place
Adjudication committee
- Professor Kåre Lilleholt, University of Oslo
- Professor Paul Krüger Andersen, University of Aarhus (1. opponent)
- Advokat, dr. juris Margrethe Buskerud Christoffersen, Adv.fa Thommessen AS (2. opponent)
Chair of defence
Supervisors
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Professor emeritus Mads Henry Andenæs
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Advokat dr. juris Filip Truyen
Summary
Constraints on transactions between companies and their shareholders according to Norwegian company legislation
Transactions between limited liability companies on the one hand and their shareholders on the other are a matter of routine: They buy and sell assets from each other, and exchange different sorts of services. In a Norwegian context, transactions between companies within the “Aker”- group are known examples from the media.
The content of an agreement between a company and its shareholder may be of such character that the agreement must be carried out in accordance with specific regulatory requirements, set forth in the Norwegian company legislation concerning so-called "distribution". "Distribution" is an expression used in this legislation referring to company actions which implies a transfer of value from the company to a shareholder. The situation where a shareholder acquires a company asset without full and adequate consideration would be an example of such action constituting a “distribution”. Company legislation on distributions protects company assets from abuse, for example by way of shareholders siphon off company assets by making so-called “disguised value transfers” through what apparently looks like a commercial transaction between the shareholder and the company. Based on an analysis of the content of the term "distribution" as used in the Norwegian company legislation, the thesis seeks to draw the line between company actions that can only happen in accordance to the special rules concerning distributions, and actions that can occur independently of these.
The thesis argues that a transaction between a company and its shareholder (both within and outside a special group context) as a general rule falls within the scope of the regulatory requirements concerning distributions when the transaction is made on terms that differs from market terms in general. Exceptions apply, however, where the company enters into a transaction without full consideration in order to ensure the long-term interests of the company in maintaining or enhancing the company assets (capital). In evaluating the long-term interests of the company in this context different considerations can be made, such as looking at the future earning potential provided by the transaction. The point is illustrated by transactions carried out by the company in order to market the business activities: The case where a company shareholder is a participant in the market for letting out business property and the company lets out a property to this shareholder to a reduced consideration in order to establish a position in this market, gives an example. The thesis argues that the meaning of the interest of the company in this context must be reflected when applying legal provisions regulating intra-group transactions. The point of view being that companies within a group according to the circumstances can offer each other favourable terms, provided the terms are in accordance with the interest of the individual companies. It is suggested that the ongoing discussion of a so-called “group-interest” in relation to the corporate governance of company groups perhaps should be nuanced in this regard.