Wednesday, November 30, 2005

Part VIII – Swedish Trading Partnership - Forms of Business Ventures in Sweden

  • A Swedish Trading Partnership (“Handelsbolag”) is formed by two or more natural persons or legal entities.

  • There must be at least two partners in a Trading Partnership. If the number of partners has dropped below two, the Trading Partnership is regarded as having gone into liquidation after six months.

Foreign Owners
  • All partners of a Trading Partnership may be foreign nationals or companies and no special acquisition permit is required.

Legal Entity
  • The Trading Partnership is a legal entity and is issued with a registration number (“organisationsnummer”). However, it should be noted that from a taxation point of view a Trading Partnership is not a legal entity and the partners of the Trading Partnership are taxed individually for the activities of the Trading Partnership.

Two Kinds of Trading Partnerships
  • Swedish Trading Partnerships are divided into two categories, normal Trading Partnership and Limited Trading Partnerships (“Kommanditbolag”). The provisions of the Act on Partnerships and Non-registered Partnerships - (Lagen (1980:1102) om handelsbolag och enkla bolag) are applicable to normal Trading Partnership as well as Limited Partnership, but there is one major difference.

  • In a normal Trading Partnership all partners have unlimited liability, jointly and severally, for the partnership's debts. A new partner who enters the Trading Partnership thereby becomes liable for all of the previous debts as well.

  • In the Limited Partnership all partners save one may have a liability limited to the unpaid registered agreed contribution (which may be as small as SEK 1). At all times one partner must be fully liable for the partnership's debts.

  • A Trading Partnership is required to keep separate accounts. The income is declared in schedules attached to the partners’ personal tax returns as the Trading Partnership is not taxed itself.

  • Normally, a Trading Partnership does not need an auditor. However, independent auditors may be required in large Trading Partnerships.

Business name
  • The registered business name of a Trading Partnership is protected in its county of registration.

Financial Year
  • A Trading Partnership may have a split financial year only if there is no natural person as partner.

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