Limited liability company

1. How do I register a limited company?

You register a limited company with the Swedish Companies Registration Office and apply for F tax to the Swedish Tax Agency. You can save time by using the e-services on verksamt.se.

2. How many owners must a limited company have?

A limited company must have at least 1 owner. This can be an individual (natural person) or a company (legal entity).

3. Is there any capital investment requirement?

Minimum share capital of SEK 50,000 is required to start a limited company.

4. What is my personal liability as owner of a limited company?

You do not normally have any personal liability; your only risk is the money you invested. If you are also a board member or managing director, there are situations in which you may be personally liable - if the company fails to pay its taxes, for example.

5. How is the company taxed?

The company pays tax on its profit for the year. The owners are taxed on the salary and any dividend they decide to take out.

6. What protection does the company name have following registration with the Swedish Companies Registration Office?

The company has exclusive rights to the name in Sweden.

7. Does a limited company have to have an auditor?

A limited company must have at least 1 authorised or approved public accountant. But small companies may choose not to have an auditor. If a small company decide to not have an auditor the company must notify the Swedish Companies Registration Office of the decision.

8. How is the company's profit distributed?

The profit is normally distributed in proportion to the number of shares owned by each shareholder.

9. Who represents the company and can sign agreements etc?

The board always represents the company. If the company has a managing director, he or she represents the company in its routine administration. The board may also appoint one or more signatories who are entitled to sign documents on behalf of the company. A signatory may, but does not have to, serve as a board member.

10. What happens if I fall ill?

As a working owner of a limited company, you are employed and the company must pay your sick pay for the first 14 days. Your sickness benefit from the Social Insurance Agency is based on the salary you have previously drawn.

11. Can I use the share capital or must it remain in the bank account?

You can use the share capital to purchase assets which remain in the company. If more than half of the registered share capital is exhausted, special rules apply. You then risk being personally liable and having to liquidate the company. In order to protect the limited company's lenders, equity (assets minus liabilities) should equal or exceed the share capital.