Act no. 71 of 30 August 1991 relating to state-owned enterprises

 

 

Ch. 1. General provisions

 

Section 1. Scope of the Act

The present Act applies to enterprises of which the state is sole owner, and to which the King has decided that the Act shall apply, cf. Section 7.

 

Section 2. Definitions

For the purposes of the present Act, state-owned enterprise means an enterprise as mentioned in Section 1.

If a state-owned enterprise owns so many shares or parts in a company that they represent a majority of the votes, the state-owned enterprise is regarded as a parent enterprise and the company as a subsidiary. If a parent together with a subsidiary, or if one or more subsidiaries, own as many shares or parts altogether in another company as mentioned in the first period, that company, too, is regarded as a subsidiary of the parent enterprise.

If a state-owned enterprise otherwise, as the owner of shares or parts in a company or by virtue of an agreement, has a controlling interest in a company and a substantial share of its operating profit, such a state-owned enterprise shall also be regarded as a parent enterprise, and the company as a subsidiary.

A parent enterprise and a subsidiary together constitute a group.

 

Section 3. Position as a party

A state-owned enterprise has rights and obligations as such, is a party to agreements with private persons and public authorities, and acts as a party in relation to courts of law and other authorities.

 

Section 4. Relation to other legislation

The Act of 10 February 1967 relating to the procedure in administrative cases (the Public Administration Act), and Act no. 69 of 19 June 1970 relating to public access to documents in the administration (the Freedom of Information Act) do not apply to state-owned enterprises. Act no. 2 of 18 July 1958 relating to public service disputes and Act no. 3 of 4 March 1983 relating to civil servants (the Civil Service Act) do not apply to employees of state-owned enterprises.

Liquidation and debt settlement proceedings according to Act no. 58 of 8 June 1984, the Insolvency Act, can not be instituted in respect of a state-owned enterprise.

 

Section 5. Prohibition against certain borrowings etc.

A state-owned enterprise can only raise loans or issue guarantees in so far as the value of its assets after the raising of the loan or issuing of the guarantee is sufficient to cover the total loan debt and guarantee liabilities of the enterprise. The calculation of the value of the assets of the enterprise shall be based on the latest approved balance sheet, corrected for disposals and additions of assets after the balance sheet date. Regard shall be had to reductions in values which have occurred since the balance sheet date and which are due to causes which can not be assumed to be transitory.

The first paragraph does not apply to credit with a normal credit period granted to the enterprise in connection with business agreements or customary guarantees issued by the enterprise with deliveries of goods, services etc. Nor does the first paragraph apply to obligations in respect of which special government guarantees have been issued.

The articles of association can lay down more detailed rules governing borrowing and the issuing of guarantees by the enterprise, including rules restricting permission to borrow or issue guarantees further than laid down in the first paragraph, and stating that certain borrowings or guarantee commitments must be approved by the enterprise general meeting.

Contracts concluded in contravention of the first paragraph are not binding on the enterprise and are not taken into consideration in the calculation of the government's funding obligation according to the second paragraph of Section 51 and government liabilities according to Section 53, unless it is shown that the other contracting party acted with due care and in good faith when the contract was concluded. Section 32 applies to contracts contrary to rules in the articles of association as mentioned in the third paragraph.

 

Section 6. Departure from the Act

The provisions in the present Act can not be departed from in the articles of association unless the contrary is specifically laid down in the Act.

 

 

Ch. 2. Formation

 

Section 7. Decision to form the enterprise

The King in Council resolves to form a state-owned enterprise, and determines which Ministry shall represent the state as owner of the enterprise. The resolution shall expressly designate the enterprise a state-owned enterprise to which the present Act shall apply, cf. Section 1.

 

Section 8. Memorandum of association

When the formation of a state-owned enterprise has been resolved, cf. Section 7, the Ministry concerned shall draw up a dated and signed memorandum of association containing a reference to the resolution and in addition at least stating the Ministry's decisions concerning:

1. The articles of association of the enterprise.

2. The management board of the enterprise, including who is to be its chairman and deputy chairman.

3. The auditor of the enterprise.

4. Investments in other forms than money, cf. the first period of the second paragraph of Section 13.

5. The date when the preferential right of employees to other appointments in the central government administration and their right to severance pay according to the Civil Service Act, cf. the third paragraph of Section 55, shall cease.

The enterprise is regarded as formed when the memorandum of association has been drawn up. From that date, the enterprise can be a party as mentioned in Section 3.

 

Section 9. Registration in the Register of Business Enterprises

Notification of the enterprise shall be sent to the Register of Business Enterprises six months at the latest after the drawing up of the memorandum of association.

 

 

Ch. 3. Articles of association

 

Section 10. Contents of the articles of association

The articles of association of the enterprise shall at least state:

1. The style of the enterprise.

2. The object of the enterprise.

3. The municipality in the realm where the enterprise is to have its registered office.

4. Which Ministry the enterprise belongs under.

5. The state's contribution to the enterprise.

6. The number, or the minimum or maximum number, of members of the management board.

7. Matters to be dealt with at the enterprise general meeting.

8. Other items which according to the present Act must be laid down in the articles of association.

 

Section 11. Amendments to the articles of association

Amendments to the articles of association are adopted by the enterprise general meeting.

 

Ch. 4. The state's contribution to the enterprise.

Distribution of enterprise funds.

 

Section 12. The required contribution

A state-owned enterprise shall have an amount of contributed capital which is appropriate to its activity. When the enterprise is dissolved, the state is obliged to contribute sufficient funds to the enterprise to meet the claims of its creditors, cf. the second paragraph of Section 51.

If according to the balance sheet two-thirds of the contributed capital has been lost, the management board shall call attention to this in the annual report, and state whether there is reason to adopt measures to secure the operation of the enterprise or as the case may be to dissolve the enterprise.

 

 

Section 13. Contribution by the state on the formation of the enterprise

The capital contributed by the state on the formation of the enterprise shall be paid in or transferred to the enterprise at the latest at the same time as the enterprise is registered in the Register of Business Enterprises.

If the contribution by the state consists of other assets than money, the memorandum of association shall state what is to be contributed. The contribution can not be transferred at a higher valuation than that at which it can be supposed to appear in the balance sheet of the enterprise. Confirmation from an auditor that the contribution has not been given a higher valuation than permitted according to the previous period shall be appended to the memorandum of association.

 

Section 14. Increasing the contributed capital by paying in new capital

After the enterprise has been registered in the Register of Business Enterprises, the enterprise general meeting can resolve to increase the state's contribution by having new capital paid in.

The minutes of the meeting shall record how much the contributed capital is to be increased by. If the contribution is in the form of other assets than money, the minutes shall state what is to be contributed. The contribution can not be transferred at a higher valuation than that at which it can be supposed to appear in the balance sheet of the enterprise. Confirmation from an auditor that the contribution has not been given a higher valuation than permitted according to the previous period shall be submitted to the enterprise general meeting. The confirmation shall be appended to the minutes.

The contribution shall be paid in or transferred to the enterprise at the latest at the same time as the increase is registered in the Register of Business Enterprises. The increase is considered to have been implemented when it has been registered in the Register of Business Enterprises.

 

Section 15. Increasing the contributed capital without paying in new capital

The enterprise general meeting can resolve to increase the state's contribution to the enterprise by means of a transfer from the enterprise's equity capital in so far as the latter according to the latest approved balance sheet exceeds the amount of the former contribution. The minutes of the meeting shall state how much the contribution is to be increased by. The increase is considered to have been implemented when it has been registered with the Register of Business Enterprises.

 

Section 16. Reducing the contributed capital

The enterprise general meeting can resolve to reduce the state's contributed capital. The minutes of the meeting shall state how much the contributed capital is to be reduced by, and whether the amount is to:

1. be used to cover losses which can not be covered by other means,

2. be repaid to the state, or

3. be transferred to reserves.

A decision as mentioned in subparagraphs 2 and 3 of the first paragraph can not be made in respect of a larger amount than will after the reduction leave the remaining contributed capital fully covered. The amount shall be calculated on the basis of the balance sheet for the last accounting year, but appropriate regard shall be had to any losses which may have been incurred after the balance sheet date. Confirmation by an auditor that the conditions in the first and second period have been met shall be submitted to the enterprise general meeting. The confirmation shall be appended to the minutes.

 

Section 17. Dividends

Distribution of the funds of the enterprise by other means than by reducing the contributed capital, cf. Section 16, or in connection with dissolution of the enterprise, cf. Chapter 10, can only be implemented in the form of dividend payments.

A decision to pay a dividend can only be made in so far as the enterprise has net assets which exceed its contributed capital. The amount shall be calculated on the basis of the balance sheet for the last accounting year. In no case can a higher dividend be declared than is compatible with prudent and generally accepted accounting principles, due regard being had to such losses as may have been incurred after the balance sheet date or which it must be assumed will be incurred.

Decisions to distribute funds belonging to the enterprise are taken by the enterprise general meeting.

 

 

Ch. 5. Management board and managing director

 

Section 18. Management of the enterprise

A state-owned enterprise is managed by a management board and a managing director.

 

Section 19. Membership of the management board etc.

A state-owned enterprise shall have a management board with at least three members. In enterprises the employees of which are represented on the board, cf. Section 20, the board shall consist of at least five members.

The managing director can not be a member of the management board.

The board is elected by the general meeting, with such exceptions as follow from the first paragraph of Section 8 and Section 20. The remuneration of board members is determined by the enterprise general meeting.

The management board shall have a chairman and a deputy chairman. Unless otherwise provided in the articles of association, the chairman and deputy chairman are elected by the general meeting.

 

Section 20. Employee representation on the management board

If for the last three accounting years the enterprise has on average had over 30 employees, two-thirds of the workforce can demand that one board member and one observer and their deputy representatives shall be elected by and from among the employees.

If in the last three accounting years the enterprise has on average had over 50 employees, a majority of the workforce can demand that up to one-third, and in any case at least two, of the members of the board and their deputy representatives shall be elected by and from among the employees.

If in the last three accounting year the enterprise has on average had over 200 enterprises, and it has been agreed that the enterprise is not to have a corporate assembly, cf. the second paragraph of Section 33, the employees shall elect one board member with a deputy, or two observers with deputies, in addition to the representation which follows from the second paragraph.

If the enterprise belongs to a group or other association of enterprises linked under a joint management, the King(1) can, on receiving an application from the group (association) or from labour unions comprising two-thirds of the employees in the group (association) or from a majority of the employees of the group (association), resolve that where the application of the second and third paragraph is concerned the employees of the group (association) shall count as employees of the enterprise, and that elections according to the second and third paragraph shall be by and from among the employees of the group (association).

By issuing regulations or taking decisions in particular cases, the King(1) can make exceptions to the first, second and third paragraphs or lay down that the fourth paragraph shall be applied in relation to parts of the group (association). The King can also issue supplementary regulations to the first, second, third and fourth paragraphs, among other things concerning the conditions for rights to vote and eligibility, concerning election procedures, concerning the settlement of disputes with regard to elections, and concerning the dropping of the position of board member and observer.

The provisions in the first paragraph of Section 21 concerning terms of office and the third period of the first paragraph of Section 22 concerning the dismissal of management board members do not apply to management board members and observers elected according to the rules in the first, second, third and fourth paragraphs.

(1) According to Royal Decree no. 827 of 20 December 1991 the Ministry of Local Government, which can delegate authority to the Industrial Democracy Committee.

 

Section 21. Terms of office

Members of the management board serve for two years. The articles of association can lay down shorter or longer terms of office, but no longer than four years. Shorter terms can be set in connection with the election of replacements. Terms of office expire at the end of the annual enterprise general meeting for the year in which the term of office expires.

A management board member remains in office until a new member has been elected even though his/her term of office has expired.

 

Section 22. Termination of service on the management board before the expiry of the term of office

Under special circumstances, a management board member is entitled to resign before the expiry of his/her term of office. Reasonable notice of resignation shall be given to the Ministry. A member of the board can be dismissed at any time by decision of the general meeting.

If a board member's functions terminate before the expiry of the term of office, or if a member is dismissed by order according to Sections 142 and 142 of the Insolvency Act, and there is no deputy representative for the member, the general meeting shall elect a new board member for the rest of the term. The election can nevertheless be postponed until the next enterprise general meeting if the board has a quorum with its remaining members and deputies.

 

Section 23. Powers of the management board

The management board is responsible for the management of the enterprise, which also sees to it that its activities are carried on in accordance with the objects and articles of association of the enterprise and guidelines laid down by the enterprise general meeting. The board is responsible for the satisfactory organization of the enterprise and shall see that its accounting and asset management are subject to proper control. The board shall supervise the managing director's management of the enterprise.

Before decisions are taken on matters which are assumed to have a significant bearing on the object of the enterprise or which will significantly change its nature, the matter shall be put before the Ministry in writing. A statement by the corporate assembly according to the third paragraph of Section 35 shall in the event be enclosed. More detailed rules can be laid down in the articles of association concerning which matters are to be submitted to the Ministry according to the first period.

The management board can not without the consent of the enterprise general meeting conclude agreements concerning participation in a company or other form of cooperation in which the enterprise has unlimited liability for the total obligations of the joint operation or for parts of these.

 

Section 24. Meetings of the management board

The chairman of the management board sees to it that the board meets as often as necessary. Board members and the managing director can demand that a board meeting be called. Unless the board in a given case resolves otherwise, the managing director is entitled to be present and to speak at board meetings.

Management board meetings are chaired by the chairman or in his/her absence by the deputy chairman. If neither is present, the board elects its chairman.

Minutes shall be kept of management board meetings and signed by all board members present. If a board member or the managing director disagrees with a resolution adopted by the board, he or she can request that the dissenting opinion be entered in the minutes. The minutes shall be sent without delay and no later than fourteen days after the board meeting to the Ministry concerned.

 

Section 25. Quorum and majorities

The management board has a quorum when over half of all the members are present. The board can, however, not adopt a resolution unless all its members have as far as possible been given an opportunity to participate in the treatment of the matter. If a board member is lawfully absent, and that member has a deputy, the deputy member shall be given the opportunity to attend.

The management board's resolutions are what the majority of those present vote for, or in the event of an equality of votes what the chairman votes for. Those voting in favour of a resolution must however always number over one-third of the total number of board members.

In elections or where appointments are concerned, the person for whom most votes are cast is considered elected or appointed. The board can decide in advance to vote again if no one obtains a majority of the votes cast. If in the election of a chairman there is an equality of votes, the election is decided by lot. In other cases, what the chairman votes for is adopted.

 

Section 26. The managing director

A state-owned enterprise shall have a managing director who is appointed by the management board, which also fixes the managing director's salary. Decisions to give notice to or to dismiss the managing director are taken by the management board.

 

Section 27. Powers of the managing director

The managing director is in charge of the day-to-day management of the enterprise, and shall observe the guidelines laid down and instructions given by the management board. The managing director shall ensure that the enterprise's accounts are kept in accordance with laws and regulations and that satisfactory arrangements are made for its asset management.

Day-to-day management does not comprise matters which, in view of the circumstances of the enterprise, are of an unusual nature or of great importance. Such matters can only be decided on by the managing director if the management board has authorised him or her to do so in the given case, or if to await the board's resolution would be a serious drawback to the operations of the enterprise. In the latter case, the board shall be informed of the matter as soon as possible.

 

Section 28. Qualification

A member of the management board or the managing director must not take part in the treatment or decision of questions of such particular importance to him- or herself or closely connected persons that he or she must be regarded as having a marked personal or financial special interest in the matter.

 

Section 29. Prohibition against accepting gifts etc.

Persons holding appointments or positions of trust in the enterprise must not on behalf of themselves or others accept such gifts, commissions, services or other benefits from others than the enterprise as may, or are intended by the giver to, affect the actions they take for the enterprise.

Nor must gifts, services or other benefits as mentioned in the first paragraph be accepted by the spouse or cohabitant of the person concerned or by his or her relative or relative by marriage in a directly ascending or descending line, or by a company in which any person as mentioned in the first paragraph has a significant interest.

Anyone who has accepted a benefit in contravention of the prohibition in this Section is obliged to pay the enterprise an amount corresponding to what has been unlawfully accepted. The second paragraph of Section 56 applies correspondingly.

 

Section 30. Obligation of the board of a subsidiary to provide information etc.

The board of a subsidiary is obliged to supply the management board and the managing director of its parent state-owned enterprise with such information as it needs in order to assess the position of the group and the result of its activities.

 

 

Ch. 6. Representation

 

Section 31. Powers of the management board and the managing director to represent the enterprise

The management board represents and signs for the enterprise.

The board can authorise a member of the board or the managing director to sign for the enterprise. The articles of association can limit the powers of the board according to the preceding period, and contain rules governing such authority as is mentioned there.

The managing director represents the enterprise in matters falling within his powers according to Section 27.

 

Section 32. When powers of representation are exceeded

If a person who represents the enterprise in acting on behalf of the enterprise has exceeded his or her powers, the action is not binding on the enterprise in so far as the other contracting party was or ought to have been aware that the powers were being exceeded, and that it would therefore be dishonest to claim a right deriving from the action.

 

 

Ch. 7. The corporate assembly

 

Section 33. Composition of the corporate assembly

Enterprises which for the last three accounting years have had an average of over 200 employees shall elect a corporate assembly with a membership of twelve or a higher number divisible by three as determined by the enterprise general meeting.

The enterprise can enter into an agreement with labour unions comprising two-thirds of the employees or with a majority of the employees to the effect that the enterprise shall have no corporate assembly, cf. the third paragraph of Section 20. The King(1) can issue more detailed rules concerning the conclusion and contents of the agreement.

Two-thirds of the members of the corporate assembly and their deputies are elected by the enterprise general meeting.

One-third of the members of the corporate assembly and their deputies are elected by and from among the employees. Labour unions comprising two-thirds of the employees, or a majority of the employees, can decide that observers and deputy representatives shall be elected in addition. The number of observers can equal up to half the number of employee representatives.

If the enterprise belongs to a group or other association of enterprises linked under a joint management, the King(1) can, on receiving an application from the group (association) or from labour unions comprising two-thirds of the employees of the group (association) or from a majority of the employees of the group (association), resolve that where the application of the first paragraph is concerned the employees of the group (association) shall count as employees of the enterprise, and that elections according to the fourth paragraph shall be by and from among the employees of the group (association).

By issuing regulations or taking decisions in particular cases, the King(1) can make exceptions to the provisions in the first and fourth paragraphs or lay down that the fifth paragraph shall be applied in relation to parts of the group. The King can also issue supplementary regulations to the first, fourth and fifth paragraphs, among other things concerning the conditions for rights to vote and eligibility, concerning election procedures, concerning the settlement of disputes with regard to elections, and concerning the dropping of the position of member of the corporate assembly.

(1) According to Royal Decree no. 827 of 20 December 1991 the Ministry of Local Government, which can delegate authority to the Industrial Democracy Committee.

 

Section 34. Terms of office etc.

Concerning terms of office and the termination of positions as members of the corporate assembly, Sections 21 and 22 apply correspondingly, but the first paragraph of Section 21 concerning the term of office and the third period of the first paragraph of Section 22 concerning the dismissal of a member do not apply to a member elected by the employees in pursuance of the fourth paragraph of Section 33.

Management board members and observers and the managing director can not be members or observers of the corporate assembly. The provisions of the present Act relating to members of the corporate assembly apply as appropriate to observers and deputy representatives.

The corporate assembly elects its own chairman from among its members.

 

Section 35. Powers of the corporate assembly

The corporate assembly shall monitor the management board's and the managing director's management of the enterprise. Each member and observer can at a meeting of the corporate assembly request information on the operation of the enterprise to the extent he or she finds necessary. The corporate assembly can initiate inquiries itself or through committees.

The corporate assembly shall present a statement to the enterprise general meeting concerning whether or not the management board's proposed profit and loss statement and balance sheet should be approved, and concerning the board's proposed application of profits or covering of losses. The board's proposal and the auditor's report shall be sent to the members of the corporate assembly at least one week before the matter is to be dealt with.

Before resolutions are adopted concerning (a) investments which are considerable in view of the resources of the enterprise or (b) rationalization measures or changes in the operations which will entail major changes in or redistribution of the workforce, the proposal shall be submitted to the corporate assembly for comment.

The corporate assembly can adopt recommendations to the board on any matter.

Other powers shall not be vested in the corporate assembly.

 

Section 36. Meetings of the corporate assembly etc.

The chairman of the corporate assembly shall call meetings as often as necessary, and also when at least one-sixth of the members or the management board so request. Unless in each given case the corporate assembly resolves otherwise, management board members, observers, and the managing director are entitled to attend and to speak at meetings of the corporate assembly. The chairman of the board and the managing director are duty bound to attend unless this is clearly unnecessary or in the event of lawful absence. In the latter case, a deputy shall be appointed. Concerning the chairing of meetings and the keeping of minutes, the second and third paragraphs of Section 24 apply correspondingly, and with regard to a quorum and voting Section 25 applies correspondingly.

The remuneration of members of the corporate assembly and observers is fixed by the enterprise general meeting.

 

Section 37. Articles in the articles of association relating to the corporate assembly

It can be laid down in the articles of association that the enterprise shall have a corporate assembly even though the conditions according to Section 33 are not met. Provisions relating to corporate assemblies issued in or in pursuance of the present Act apply correspondingly in such cases.

 

 

 

 

Ch. 8. The enterprise general meeting

 

Section 38. Generally concerning the powers and composition of the enterprise general meeting

 

The Ministry exercises supreme authority over the enterprise at the annual enterprise meeting. The Ministry's authority over the enterprise can not be exercised elsewhere than at the enterprise general meeting.

The management board, managing director and auditor of the enterprise are entitled to attend and to speak at the general enterprise meeting. The managing director and the chairman of the board are required to attend unless this is clearly unnecessary or in the event of lawful absence. In the latter case, a deputy shall be appointed. The auditor of the enterprise is obliged to attend in so far as the matters to be dealt with are of such a nature that his presence can be considered necessary.

 

Section 39. The annual enterprise general meeting

The annual enterprise general meeting is held within six months of the end of each accounting year.

At the annual enterprise general meeting, the following matters shall be discussed and decided:

1. The adoption of the profit and loss statement and balance sheet of the enterprise, including the application of the profit for the year or the covering of the loss for the year.

2. The adoption of the consolidated profit and loss statement and balance sheet.

3. Other matters which are required by statute or articles of association to be treated at the annual enterprise general meeting.

 

Section 40. Extraordinary enterprise general meetings

Extraordinary enterprise general meetings are held when the Ministry, the management board or the auditor finds it necessary.

 

Section 41. Notice of enterprise general meetings

The Ministry calls enterprise general meetings and decides how they are to be called. Notice of the annual enterprise general meeting shall be given no later than two weeks before the meeting, and shall have enclosed with it the annual report, the auditor's report, and the statement by the corporate assembly. Notice of extraordinary enterprise general meetings shall be given no later than one week before the meeting, unless shorter notice is absolutely unavoidable in a particular case.

Notice shall be sent to those who according to the second paragraph of Section 38 are entitled to attend the enterprise general meeting.

The notice shall clearly specify the matters to be dealt with at the meeting. In the event of a proposal to amend the articles of association, the main content of the proposal shall be reproduced in the notice. The enterprise general meeting can not adopt resolutions on other matters than those mentioned in the notice unless all those who according to the second paragraph of Section 38 agree.

 

Section 42. Chairing of the meeting and the keeping of minutes

The enterprise general meeting is chaired by the chairman of the management board. If the enterprise has a corporate assembly, the meeting shall be chaired by the chairman of the corporate assembly.

The chairman shall see to it that minutes are kept of the enterprise general meeting. The minutes shall be signed by the chairman and one other person elected from among those present. If anyone who according to the second paragraph of Section 38 is entitled to attend the meeting disagrees with the Ministry's decision, his or her dissenting opinion shall be entered in the minutes.

 

 

Ch. 9. Auditing and inspection

 

Section 43. Auditing of the enterprise

A state-owned enterprise shall have one or more auditors, chosen by the enterprise general meeting. At least one shall be a state authorised public accountant.

 

 

Section 44. Inspection

When special reasons so indicate, the enterprise general meeting can resolve that the enterprise, or specific circumstances relating to its administration or accounts, shall be inspected.

Whoever on behalf of the enterprise general meeting undertakes the inspection is entitled to carry out any examinations in the enterprise that he or she finds necessary and can in that connection request any necessary assistance from the enterprise. The person undertaking the inspection can demand any information necessitated by the inspection concerning the circumstances of the enterprise from members of the management board, the managing director, or any other employee or holder of a position of trust in the enterprise. If the enterprise belongs to a group, the right to conduct examinations and require information according to the first and second periods of this paragraph also applies to subsidiaries. A person carrying out an inspection on behalf of the enterprise general meeting has the same obligations regarding professional secrecy as apply to auditors, cf. the third paragraph of Section 15 of the Act relating to auditors.

 

Section 45. Control by the Office of the Auditor General

In respect of state-owned enterprises and their wholly-owned subsidiaries, the Office of the Auditor General is entitled to demand such information as it finds essential to the exercise of its control both from the enterprise itself and from its chosen auditor. To the extent it finds necessary, the Office of the Auditor General can itself carry out inquiries in the enterprise. The Storting can moreover issue rules governing the control by the Office of the Auditor General of the management of state interests in the enterprise, including which documents etc. are to be sent to the Office of the Auditor General.

The Office of the Auditor General shall receive notice of and have the right to attend the enterprise general meeting and meetings of the corporate assembly.

 

 

Ch. 10. Dissolution and liquidation

 

Section 46. Resolution to dissolve the enterprise

A resolution to dissolve the enterprise is adopted by the King in Council.

 

Section 47. Dissolution following notification by the management board

If the management board has reason to believe that the enterprise is unable to meet its obligations as they fall due, it shall promptly so notify the Ministry. Unless a plan for continued operation is adopted according to which creditors will receive payment when due, the enterprise shall be dissolved, cf. Section 46.

For the first six months after a notification as mentioned in the first paragraph has been sent to the Ministry, no forced sale or other compulsory realisation of the assets of the enterprise can be held.

 

Section 48. Dissolution demanded by a creditor

When there is reason to believe that the enterprise can not meet its obligations as they fall due, notification as mentioned in the first paragraph of Section 47 can also be sent to the Ministry by a creditor whose claim is not sufficiently secured. Notification as mentioned can also be sent by a creditor whose claim is not sufficiently secured if he has demanded payment by the enterprise of a certain and due debt and at the earliest four weeks after the first demand has sent the enterprise a further demand with a deadline for payment of at least two weeks. Notification must be in the event be sent in the course of the first two weeks after the expiry of the deadline for payment. When notification has been sent to the Ministry according to this paragraph, the second period of the first paragraph and the second paragraph of Section 47 apply correspondingly.

If no plan as mentioned in the second period of the first paragraph of Section 47 has been presented within six months of the sending of a notification as mentioned in the first paragraph, and no decision has been taken to dissolve the enterprise, a creditor as mentioned in the first paragraph can demand the dissolution of the enterprise by court order.

 

Section 49. Decisions concerning liquidation etc.

When a decision has been taken to dissolve the enterprise, cf. Section 46 and the last paragraph of Section 48, the Ministry shall within two weeks call an enterprise general meeting to elect a liquidation committee and adopt more detailed rules concerning the liquidation procedure.

When a liquidation committee has been elected, the regular management board shall cease to function.

 

Section 50. Notification to the Register of Business Enterprises and notice to creditors

The liquidation committee shall promptly notify the Register of Business Enterprises of the decision to dissolve the enterprise. At the same time as it registers the notification, the Register of Business Enterprises shall publish the decision and send notices to the enterprise's creditors that they must present themselves to the enterprise within a time limit set by the liquidation committee and reckoned from the date of the last published announcement. The time limit shall be at least one month and no more than three months. The announcement shall be published twice at an interval of at least one week in the Norwegian Gazette and one newspaper with widespread local readership.

 

Section 51. Satisfaction of creditors

The liquidation committee shall see that the claims of all known creditors are met in so far as any creditor does not waive his or her claim or accept another debtor instead. This does not apply, however, to creditors with disputed or uncertain claims. Such claims are settled with the state after the dissolution, cf. Section 53.

In so far as there are not enough funds in the enterprise to satisfy the creditors whose claims shall be met according to the first paragraph, the state shall contribute to the enterprise the funds needed to satisfy the creditors.

 

Section 52. Final dissolution

When the claims have been met of all known creditors whose claims are to be met according to Section 51, and any surplus has been paid to the state, the liquidation committee shall submit a written settlement to the enterprise general meeting for approval.

When dissolution has been finally approved by the enterprise general meeting, notification shall be sent to the Register of Business Enterprises that the enterprise has been finally dissolved.

 

Section 53. Responsibility of the state towards creditors after the dissolution

After the enterprise has been dissolved, the state settles with creditors whose claims have not been met according to Section 51.

A creditor's claim against the state according to the preceding paragraph becomes statute-barred at the latest three years after the date when notification of the final dissolution of the enterprise was sent to the Register of Business Enterprises. In the case of disputed or uncertain claims, however, cf. the second period of the first paragraph of Section 51, the rules in the Act relating to the limitation period for claims apply.

 

Section 54. Mergers with other state-owned enterprises

The King in Council can resolve that a state-owned enterprise shall be dissolved by transferring its assets and rights, including official permits and obligations, as a whole to another state-owned enterprise. The enterprise's creditors and other holders of rights can not object to the transfer or adduce that it constitutes grounds for regarding the right as lapsed.

When a resolution according to the first paragraph has been adopted, the Ministry concerned shall immediately call enterprise general meetings of the enterprises affected. The enterprise general meetings adopt resolutions concerning the more detailed implementation of the merger.

 

 

Ch. 11. Conversion to a state-owned enterprise

 

Section 55. Conversion to a state-owned enterprise

A state business or business run by a wholly-owned public corporation, or part of such a business, can as a whole be transferred to a state-owned enterprise by transferring its assets and rights including official permits and obligations connected with the activity to the state-owned enterprise. Creditors and other holders of rights can not object to the transfer or adduce that it constitutes grounds for regarding the right as lapsed.

Also regarded as wholly-owned public corporations according to the first paragraph are wholly-owned subsidiaries of joint-stock companies of which the State owns all the shares, and wholly-owned subsidiaries of state-owned enterprises.

In the event of the conversion of a state business to a state-owned enterprise, subsections 2 to 6 of Section 13 of the Civil Service Act relating to preferential rights to other posts in the central government administration and rights to severance pay shall continue to apply to employees who are given notice for reasons mentioned in litra (a), (b) and (c) of subsection 1 of Section 13 of the Civil Service Act, and to whom the rules applied before the conversion. The preferential right to other posts in the central government administration and the right to severance pay according to the preceding period cease at a date to be specified after the conversion to a state-owned enterprise. The date is set by the Ministry for the state-owned enterprise in question, and mentioned in the memorandum of association, cf. subsection 5 of the first paragraph of Section 8. The provision in the present paragraph in no way limits the rights of employees according to subsection 2 of Section 60 and Section 67 of the Working Environment Act.

The King(1) can by issuing regulations or in each particular case issue more detailed rules concerning the transfer of business activities to state-owned enterprises according to the first, second and third paragraphs.

(1) The Ministry of Labour and Government Administration according to Royal Decree no. 827 of 20 December 1991.

 

 

Ch. 12. Liability for damages and criminal liability

 

Section 56. Liability for damages

Members of the management board, members of the corporate assembly and the managing director are liable for damages in respect of any harm deliberately or negligently done to the enterprise, the state or others in the exercise of their duties.

Liability for damages according to the first paragraph can be reduced in so far as this is found reasonable in the light of the degree of blame, the extent of the harm, the person's financial circumstances, and other circumstances.

 

Section 57. Decisions to claim damages

The decision that the enterprise shall claim damages according to Section 56 is taken by the enterprise general meeting.

 

Section 58. Criminal liability

A management board member, member of the corporate assembly, or managing director who deliberately or negligently violates provisions issued in or in pursuance of the present Act or who aids or abets such violation is liable to punishment by fines or under aggravating circumstances imprisonment for up to three months.

 

 

Ch. 13. Entry into force and transitional provisions.

Amendments to other Acts.

 

Section 59. Entry into force

The Act enters into force from such date as the King shall decide(1).

With effect from the entry into force of the present Act, Act no. 3 of 25 June 1965 relating to certain public enterprises etc. is repealed.

(1) From 1 January 1992 according to Royal Decree no. 562 of 30 August 1991.

 

 

Section 60. Transitional provisions

State enterprises organized in accordance with Act no. 3 of 25 June 1965 relating to certain public enterprises etc. must be converted to state-owned enterprises according to the present Act within one year of the entry into force of the Act unless the enterprise before the expiry of the time limit has been reorganized into another form of company or dissolved. The first paragraph of Section 55 applies correspondingly to conversion to a state-owed enterprise according to the preceding period.

 

Section 61. Amendments to other Acts

With effect from the entry into force of the present Act(1), the following amendments are made to other Acts:...

(1) 1 January 1992 according to Royal Decree no. 562 of 30 August 1991.