Primary forms of business in Sweden

The first stage in establishing a company is selecting the form of business. The most popular of forms of business in Sweden is Limited company (AB). Deciding which type of business to set up depends on the business area of activity and related risks.

When selecting the type of business to set up, we recommend taking into account the liability of owners including any representatives.

Limited company´s and economic association´s owners are not personally liable for any obligations of the company whereas trading partnership´s, limited partnership´s owners and sole trader are personally responsible for any breaches of obligations.

	Trading partnership (HB)	Limited partnership (KB)	Limited company (AB)	Economic association	Sole trader
Number of owners	At least 2 people or enterprises	At least 2 people or enterprises	At least 1 person or enterprise	At least 3 people or enterprises	Only 1 person
Liability of owners	The partnership can enter into agreements, but if it cannot pay its debts, the partners are liable	The partnership can enter into agreements, but if it cannot pay its debts, the general partner is liable	The company can enter into agreements and is liable for its debts	The association can enter into agreements and is liable for its debts	The business operator is personally liable for the agreements entered into and for the debts of the enterprise
Capital	No	General partner: no Limited partners: at least SEK 1	At least SEK 50,000	Yes, in the form of a cash or work investment	No
Representative	The partners	The general partner	The board of directors	The board of directors	The sole trader
Accounting	If the trading partnership has a legal entity of a certain size as a co-owner, the partnership must appoint an accountant and submit an annual report to the Swedish Companies Registration Office	If the limited partnership has a legal entity of a certain size as a co-owner, the partnership must appoint an accountant and submit an annual report to the Swedish Companies Registration Office	All limited companies must file an annual report and, where applicable, an auditor’s report with the Swedish Companies Registration Office (Bolagsverket). Small companies may choose not to have an audito	An annual report must be prepared and an auditor must be appointed	Only annual accounts. Auditor is not required
Distribution of profits	As per agreement if such an agreement exists. Equal distribution otherwise	As per agreement if such an agreement exists. If no agreement exists and the partners cannot agree on the allocation, the issue must be decided in court	Profit can be allocated to the shareholders in the form of a dividend	Profit can be divided between the members in the form of a bonus	Normally only to the business owner.