Co-operatives (SA)

Do two or more people want to run your own business? Or are you already an established business and want to work together in order to improve your products or services? Do you need to carry out shared tasks? If so, a co-operative may be the right organisational form for you.

The key features of a co-operative:

  • No requirement for contributed capital, but the co-operative must have adequate equity
  • User benefits and cooperation more important than return on capital
  • Separate legal person
  • Possible to be an employee
  • The co-operative's wealth belongs to the co-operative and not the owners
  • Profits can be divided among the members depending on their contribution to the co-operative
  • Democratic - one member normally only has one vote
  • Cannot be bought out by external parties

The purpose of a co-operative

The main purpose of a co-operative is to promote the financial interests of its members. Pivotal to this is the fact that as a member you safeguard your financial interests through co-operation, as an employee, supplier or customer of the co-operative. The members' need to work together is more important the need for the co-operative to generate the maximum possible surplus.

The main purpose of promoting the financial interests of the members is interpreted broadly. For example, co-operatives can be used by groups of people who carry on commercial activity to varying degrees. This means that road owner associations and landowner associations, for example, can benefit from setting themselves up as a co-operative even though their financial activity is limited in scope.

Act relating to co-operative societies (in Norwegian only)

The Norwegian Co-operative Organisation on cooperatives (in Norwegian only)


Co-operatives can be founded by either natural or legal persons. Co-operatives must have at least two members/owners at all times. Natural persons must be over 18 years of age.
In co-operatives, all owners must be treated equally and have the same influence. The general rule is therefore that all the members have one vote at the annual meeting.

Requirements concerning capital investments

There is no requirement for a share contribution (the amount that the members pay when they become a member of the co-operative). However, co-operatives must still have adequate equity at all times. The equity requirement must be assessed against the scope of the operation. In practice, this can therefore mean that the co-operative must have a share contribution.


Members are not liable in any way for their co-operative's debts over and above any share contributions.

Payment of contributions

In a co-operative, the members can receive a share of the profits based on their participation in the co-operative. Examples of transactions include purchases from, sales to or work for the co-operative.

Here are some points that are important for you to consider when you consider establishing a cooperative:

Financial risk

All businesses involve financial risk, but when it comes to co-operatives, one must particularly look at the level of business that is to be started and whether or not a deposit is to be paid. As previously mentioned, the main purpose of a co-operative is to promote the interests of the members, not to create as much profit as possible for the owners. There are also limits on how large ownership shares one can have. Furthermore, there are limitations in relation to the distribution of surplus, the distribution is linked to the interaction with the cooperative. All these points help to reduce the financial risk you as an owner take by establishing a cooperative.


One of the advantages of establishing a co-operative is that as an owner you can also be an employee of the enterprise. You will then have the same rights as other employees. The co-operative will have employer responsibility for you, and you will receive a salary.

Social security rights


As owner and employee, you will be entitled to 100% sick-pay from the first day of sickness. However, you should note that NAV will not cover sick-pay until the 17th day. During the first 16 calendar days, it is the employer that must pay sick-pay.

Unemployment benefit

As owner and employee, you accrue the right to unemployment benefit in the event of unemployment in the same way as other employees. Contact NAV to find out the conditions for receiving unemployment benefit.

NAV on the unemployment benefit scheme (in Norwegian only)


As employee and owner, you accrue pension rights on what you receive in salary in the same way as other employees. However, most people will experience a substantial reduction in their income when they retire. If the company has many employees, it will normally be required to set up an occupational pension scheme for its employees.


Surpluses generated by co-operatives are taxed at the rate of 22%. The tax must be paid in the year after the income year in two equal instalments during the first six months.

Dividends (often referred to as "back payments") to members who are not legal persons are general tax-free. Back payments are normally taxable for individuals when the payment is linked to income or
costs relating to commercial enterprise or other taxable income-generating activity.

Tax for co-operatives

Value added tax

Value added tax (VAT) is a sales tax on goods and services. Some goods and services are exempt from VAT or subject to reduced rates. Co-operatives with a vatable turnover of more than NOK 50,000 over a 12-month period must register in the VAT Register.

The Norwegian Tax Administration – Registration in the Value Added Tax Register


Commercial activity normally also triggers a bookkeeping obligation. This means that you must retain documentation of your incomes and expenses and arrange them in a system. Co-operatives will also become subject to the accounting obligation if they have an annual turnover of more than NOK 2 million. This means that the co-operative must submit annual accounts to the Register of Company Accounts every year. 

Co-operatives with an annual turnover of more than NOK 7 million are required to have their annual accounts audited.

Roles within co-operatives

The annual meeting is the supreme authority of a co-operative. Members have a right to attend these meetings and to vote at them. All co-operatives must hold an annual meeting every year. The annual meeting elects the board.

The Board of Directors must consist of at least three persons, and the Board should convene when required. The cooperative may decide that the board should have two members, but in that case, at least one deputy member must be elected. This must be stated in the articles. At least 50 % of the board members must reside in Norway, Great Britain, Northern-Irland, Switzerland, or another EEA country. The Board of Directors appoints the General Manager.

The Brønnøysund Register Centre – Roles in a co-operative


In certain industries, you must have a permit to run your own business. Examples of this are the catering/restaurant and cleaning services sectors.

Registration and organisation number

Registration of a Co-operative is done via the Coordinated register notification in Altinn. 

Once the application for registration has been approved, the enterprise will be allocated an organisation number.

More about starting up and registering a co-operative 

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