Sole proprietorship or AS? How to choose
Updated June 4, 2026
The choice between a sole proprietorship (ENK) and a limited company (AS) is mostly about liability, tax and how you take money out. An ENK is simple and free to start, but you carry personal liability. An AS gives limited liability and the option to draw a salary, but requires NOK 30,000 in share capital and more formal operation.
Liability and risk
In a sole proprietorship you are personally liable for the debt — your personal finances and the business are linked. In a limited company, liability is limited to the share capital, so personal assets are in principle shielded.
Tax and salary
In an ENK the entire profit is taxed as personal income, and you can’t pay yourself a salary — you take private withdrawals. The marginal tax rate can be relatively high.
An AS pays 22% tax on profit. You can be an employee and draw a salary (with withholding tax and employer’s contribution), and/or take dividends that are taxed on top of the corporate tax.
Start-up and requirements
- ENK: free to register, no capital requirement, simpler accounting, no audit, and no A-melding without employees
- AS: requires NOK 30,000 in share capital, more formal registration, full accounts with annual accounts to Brønnøysund, and an A-melding when you draw a salary
Which should you choose?
Many start as an ENK when risk is low and operations are simple — for example small-scale freelancing or consulting. An AS fits better when you want to shield your personal finances, draw a salary, raise capital or grow with several owners. You can also start as an ENK and convert to an AS later.