Limited Liability Company

General Information

The AB is the most popular corporate form providing limited shareholder liability and attracts mostly small and medium-sized businesses. A relatively moderate statutory framework allows a high degree of flexibility in drafting the articles of association.

Incorporation

Formation by at least one person - individuals resident in European Economic Area or legal entity founded and with registered office within said area; nationality irrelevant.
Incorporation requires deed of formation followed by entry into centralised commercial register. Application to Companies Registration Office shall not be filed later than six months after signing of deed of formation. Company comes into existence immediately upon registration. Persons acting in company's name before it is registered are personally liable for such action.

Duration of incorporation approximately 5-6 weeks.

Incorporation costs of at least € 220 (registration fee).

Capitalisation and Financing

The statutory minimum share capital, which must be fully paid up on registration, amounts to SEK 100,000 (approximately € 11,000). Shares can be paid in cash or kind. Non-cash considerations must, however, be valued to ensure their adequacy.

Board Structure

An AB is managed and represented by its board of director(s) in and out of court. The board may consist of one or two members, provided that at least one deputy is appointed. The appointment of a managing director who need not be on the board is optional. Unless exception is granted, the managing director as well as at least half of the members of the board of directors must reside in European Economic Area. The principle of individual management and representation applies, unless otherwise provided for in the articles.
Board and managing director may be bindingly instructed by the shareholders' meeting.

Shareholders' decisions are made by way of shareholders' resolutions at the annual or extraordinary general meeting of shareholders. General meetings must be held in Sweden.

Annual Costs

Approximately € 90 (related to filing of annual accounts).

Corporate Taxation and Financial Reporting

Corporations doing business in Sweden are liable for business income tax. Tax rate is 28 %.
Annual accounts shall be sent to the registration office within 11 months from the end of the financial year. Otherwise, board members and managing director become personally liable for the obligations of the company. Accounts must consist of a balance sheet, a profit and loss statement and a directors' report. Accounting must be done in accordance with Swedish GAAP.

Employee Participation in Corporate Bodies

Under the Private Sector Employees Act, local labour unions are entitled to appoint two directors and two deputies in companies with at least 25 employees. If workforce exceeds 1,000, three directors and three deputies may be appointed.