Company establishment in Sweden
Company establishments in Sweden
In order to establish a company in Sweden, there are several possibilities. A foreign company may set up:
- A branch office in Sweden, but a branch office is not however a separate legal entity;
- A subsidiary in Sweden, which could be a limited liability company, partnership or a limited partnership;
- A separate entity, which could be a limited liability company, partnership or a limited partnership.
Physical and legal entities might both be founders of a partnership or limited liability company. The Companies Act differentiates between private and public limited liability companies.
Below is short description of Branch Office and a Limited Liability Company in Sweden.
Branch Office in Sweden
The foreign company owns all assets utilised within the branch and all liabilities of the branch office are the responsibility of the foreign company. A branch office is a subject to Swedish law as regards any legal matters that may arise in connection with activities in Sweden.
Management of the company:
A branch office shall be managed by a managing director. The managing director is responsible for the activities of the branch office. A power attorney will be issued to act and to accept service of process on behalf of the foreign company in all matters, which relate to the company’s activities in Sweden.
Financial accounts for the Swedish branch must be maintained and the accounts are to be held separate from the accounts of the foreign company. Each year, the managing director shall submit to companies’ registration office a certified copy of the audited accounts and the auditor’s report of the branch for the previous financial year.
A branch does not have a share capital and there are no other mandatory capital requirements.
Establishing a Branch Office:
Documents have to be submitted to Bolagsverket (Swedish companies registration office), mostly in Swedish. The business activities of a branch office may commence when the application has been submitted to Bolagsverket.
Limited Liability Company in Sweden
The shareholders are in principle not liable for the obligations of the company. Swedish law applies, particularly the Swedish Companies Act. The company name must be registered with the Swedish Companies Registration Office (Bolagsverket).
Management of the company:
The limited liability company must have a board of directors. Chairman must be designated whenever the board has more than one member. The board of directors is always entitled to represent and sign for the company. In private limited liability companies it is sufficient to have one board member and one deputy board member. In public limited liability companies, the board of directors shall comprise not less than three board members. A public company must also have a managing director at all times.
A limited liability company is required to establish an annual report after the expiry of each financial year. Not more than one of the following three conditions may be fulfilled for the company not to have to appoint an auditor:
- The average number of employees in the company has exceeded 3 during each of the two most recent financial years;
- The company’s reported balance sheet total for each of the two most recent financial years has exceeded SEK 1.5 million (157.480,32 EUR);
- The company’s reported net turnover for each of the two most recent financial years has exceeded SEK 3 million (314.960,63 EUR).
If the size of the assets or the number of employees of the company reaches a certain level or if the company’s shares are listed on a stock exchange, the company becomes obligated to nominate at least one chartered auditor.
The minimum share capital in a private limited liability company is SEK 50,000 (5.249,34 EUR) whereas the share capital in a public limited liability company must amount to at least SEK 500,000 (52.493,44 EUR).
Establishing a Limited Liability Company in Sweden:
The most convenient way for a foreign company to quickly establish a limited liability company is to acquire an already formed and registered company, a shelf company. The only documentation required in relation to a purchase of a shelf company is a short transfer agreement. No notarisation is necessary. Following a purchase of a shelf company, the owner should change the corporate characteristics, such as, company name, board members, articles of association, and register such changes with Bolagsverket.
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