Trading partnership/Limited partnership

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A trading partnership is an alternative if at least two natural persons or legal entities wish to start a business together. There is no requirement to invest capital, although the partners are personally, jointly and severally liable for the company's debts.

Personal liability means the partners are responsible with their personal assets for the company's liabilities and agreements. Joint and several liability means that each partner personally can be forced to pay all the company's liabilities. The partner who has paid can then demand that the other partners pay their share of the debt.

A limited partnership is a variant of a trading partnership. At least one person must have unlimited personal liability for the company's liabilities; the other partners are only liable for the capital they have invested.

Taxes and contributions

A partnership is not taxed on its profits. Instead the partners are each taxed on their share of the profits. Each partner pays preliminary tax during the year. The Swedish Tax Agency (Skatteverket) makes decisions concerning preliminary tax.

Preliminary tax is paid monthly in advance and is checked against final tax when you submit your income return. During the year, you make withdrawals from the business as a partner.

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