• Unincorporated business with one owner
• Owner pays personal income tax on profits

A sole proprietorship is an unincorporated business with just one owner who pays personal income tax on profits earned.

Any debts or losses incurred cannot be shared with other individuals.

It is the cheapest and easiest business structure to establish with the individual legally responsible for all aspects of the business.

Simple and cost-effective, but the owner has unlimited liability.

• Two or more individuals
• Unlimited liability

A general partnership is a business arrangement whereby two or more individuals agree to share responsibilities, assets, profits, financial and legal liabilities of a jointly owned business; granting unlimited liability.

Shared responsibilities but comes with unlimited liability for partners.

• Some partners have limited liability
• No minimum start-up capital

In a limited partnership, some partners are not entitled to manage its affairs but provide all or part of the partnership's capital. These partners are limited in their liability.

In addition, one or more other partners are nominated as managing or general partners and have unlimited liability for the partnership's debt and losses.

There is no need for a minimum start-up capital.

Flexible structure with limited liability for some partners.

• Owned by a small number of shareholders
• Minimum capital requirement: SEK 50,000

A Private Limited Company is owned by a relatively small number of shareholders, and the sale of company shares is handled privately.

An individual/owner is only responsible for the business's financial liabilities to the extent that they invested in the company.

The minimum capital requirement is SEK 50,000.

Limited liability with a minimum capital requirement.

• Ownership open to the public
• Minimum capital requirement: SEK 500,000

A public company is a corporation whose ownership is open to the public. Anyone can buy shares in the company's stocks.

A limited company is a corporation in which an individual's financial liability for the company is restricted to the capital investment.

The minimum capital requirement is SEK 500,000.

Public ownership with a higher capital requirement.

• Swedish Companies Registration Office

Corporate information is available at the Swedish Companies Registration Office: www.bolagsverket.se.

Use the Swedish Companies Registration Office for comprehensive corporate information.

• Swedish Companies Registration Office
• Private reporting agencies

You can obtain information on the financial state of affairs for companies and industry at the Swedish Companies Registration Office.

There are also numerous private reporting agencies offering credit checks.

Combine data from the Swedish Companies Registration Office with private reports for comprehensive financial information.

• Credit reports
• Online services

Normally you find this information in a credit report.

Credit reports are offered as a service online.

Utilize online credit report services to check for existing judgments against businesses.

• Copy contract
• Copy invoices and credit notes
• Copy orders and order confirmation
• Clear statement of account
• Proof of delivery

Contracts can be concluded orally or in writing. Most parties opt for written agreements because this is more certain.

A claimant is free to choose which evidence it wishes to submit in support of the claim, but as a minimum, it is advisable to have at least the following available:

• Copy contract
• Copy invoices and credit notes
• Copy orders and order confirmation
• Clear statement of account
• Proof of delivery

Ensure you have all necessary documents to support your claim in court.

• Must be agreed in the contract
• Conditions must be specified

Retention of title is used when an asset is sold, and the purchase price is payable later and you want to retain ownership until payment has been made.

In Sweden, retention of title must be agreed in the contract under the following conditions:

• The clause must be concluded while the parties enter into the sales agreement
• The clause must be clearly specified
• Stipulate that the buyer may not consume, resell or mix with or attach the object to other assets

Consider including retention of title clauses in contracts to protect against buyer's default or insolvency.

• Mandatory
• Issued four days prior to claims

A warning notice to the debtor is mandatory before filing any enforcement claims. The warning notice must be issued four days prior to such claims and must include:

• Creditor name and overview of the claim
• The total amount of the claim, including penalties (interest)
• Payment method required
• A warning that the claim will be enforced through the enforcement authority in case the claim is not settled by the required date
• Information on how to dispute the claim

If this measure has been taken and the payment still has not been made after the notice period (according to the law), the creditor may file for enforcement.

Always send a comprehensive warning notice before initiating legal proceedings.

• Statutory interest rate: 4% + 8%
• Collection fee: SEK 180

Any interest agreed upon within a signed contract is applied from the day of payment. Otherwise, statutory interest and collection costs will be applied.

The collection fee for the demand letter is SEK 180, according to Section 4 in the Debt Recovery Act.

Statutory interest: The National Bank of Sweden, the Riksbank, reference rate of 4% plus 8%.

Be aware of the statutory interest rate and ensure any agreed rate is enforceable.

• Fee of SEK 60 for payment reminder
• Fee of SEK 180 for debt recovery demand
• Fee of SEK 170 for repayment plan

If you have an agreement on a payment reminder, you have a right to a fee of SEK 60 if sending a payment reminder in the event of non-payment.

You have a right to SEK 180 in case of sending a debt recovery demand and if setting up a repayment plan a right to SEK 170.

Ensure you are aware of the fees associated with payment reminders and debt recovery demands.

• Ten years from when the debt value falls due
• Interrupted by settlement or acknowledgment

The limitation period is ten years from when the debt value falls due.

This period may be interrupted if the debtor either settles or acknowledges the claim, or a court case is opened regarding the debtor.

Act within the appropriate timeframe to preserve your right to legal action.

• Mediation and arbitration
• Encouraged by courts
• Not legally obligatory

Although there is no legal obligation to explore ADR options before litigation, courts may encourage such avenues.

The two most common ADR methods are mediation and arbitration. Other less common methods include expert determination and dispute review board.

Further information: Swedish Arbitration Portal

Consider including arbitration clauses in contracts for large commercial disputes.

Be aware of various ADR options before proceeding to litigation.

• Unpaid, undisputed debts can be claimed through the Swedish Enforcement Authority (SEA)
• Summary Proceedings for financial claims

Unpaid, undisputed debts can be claimed upon to the Swedish Enforcement Authority (Kronofogden), also known as "SEA" or "KFM". The SEA is a government agency overseeing debt collection in Sweden.

The organisation has the power to withdraw money from a debtor's account, deduct from a debtor's income and visit the debtor's premises.

For financial claims, creditors may apply for a payment order at the Enforcement Service which is often referred to as 'Summary Proceedings'. The payment order is issued by a local court and is considered as a judgement, against which the debtor has several weeks to appeal. At which point the claim is transferred to ordinary court proceedings.

Understand the court process and be prepared for a judge-driven procedure with less emphasis on precedent.

• Up to twelve months or longer

Legal proceedings may take up to twelve months or longer subject to the case, the availability of judges and the co-operation of both parties.

Be prepared for potentially lengthy court proceedings, lasting up to twelve months or more.

• Fixed fees for summary proceedings
• Additional costs may vary

The summary proceeding has fixed fees, if the requirement is below 23,250 SEK, the lawsuit costs 900 SEK. If it is a larger case with the amount above 23,250 SEK, it costs 2,800 SEK.

It is difficult to estimate the remaining costs of such cases given the potential fees, interest, extrajudicial costs, costs of experts and/or witnesses and the debt value.

All reasonable trial and preparation costs for the case, including lawyers' fees are recoverable and contractual costs would be charged to the debtor. In the absence of a contract, the case is restricted to the statutory debtor fee for the demand (collection) letter.

Consider potential costs when deciding to pursue legal action. Be prepared for high court fees, but understand that a significant portion of costs may be recoverable if successful.

• Moveable or immoveable assets
• Deduction from income

As mentioned above, the application for enforcement will be handled, decided, and enforced by the SEA.

Enforcement options may take place in the form of moveable or immoveable assets, with the SEA also holding the right to deduct any income towards the debtor in the form of salaries or shares.

Be aware of the various enforcement options available, including attachment and sale of assets, bankruptcy proceedings, and income deductions.

• Regulation (EC) 44/2001
• Lugano Convention

Foreign judgments enforcement is subject to Regulation (EC) 44/2001 on the jurisdiction, recognition and enforcement of judgments in civil and commercial matters (Brussels Regulation).

Judgments from outside the EU are covered under treaties concluded between Sweden and other States such as the Lugano Convention.

The enforcement of a judgment under the Brussels Regulation requires a formal decision of a competent authority, which is the Svea Court of Appeal in Stockholm.

Additional documents may be required, depending on the provisions of the applicable instrument. The examination carried out by the Svea Court of Appeal does not concern the merits of the judgment but only addresses questions related to form, procedure, and public policy.

Ensure all requirements are met for foreign judgment recognition and enforcement in Sweden.

• Option before formal proceedings
• Binding on all creditors if imposed by court

Before entering insolvency proceedings, debtor companies have the option to enter into a voluntary arrangement with creditors to settle all or part of their debts.

Although not obligatory, courts may impose such actions upon a case, in which case it becomes binding on all creditors (public composition).

Consider voluntary arrangements to settle debts before formal insolvency proceedings.

• Oversees the dissolution of the debtor

Enforced Dissolution oversees the dissolution of the debtor.

Use enforced dissolution for winding-up and asset distribution.

• Liquidates all available assets
• Settles outstanding debt values

Bankruptcy proceedings involve the administrator liquidating all available assets with a view to settling as much of the outstanding debt values claimed by creditors as possible.

Bankruptcy is closed upon the winding up of the debtor and removal from the commercial register.

Consider bankruptcy proceedings for winding-up and asset distribution.

• Oversees activities and management of the debtor
• Reduces overall debt position

Reconstruction is a process whereby an insolvency practitioner oversees the activities and general management of the debtor company with a view to selling assets to reduce the company's overall debt position in agreement with its creditors.

This procedure is executed in the hope that the debtor can continue operations.

Use reconstruction to manage and reduce debt while continuing operations.