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

Formation

• 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.

Accounts

• 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.

Auditor

• 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.