Sole trader

Content

A sole trader (also known as sole proprietor) is a physical person who runs a business and represents it himself or herself. A business that operates in this way is not a legal entity and the sole trader is personally liable for the performance of contracts, payment of debts etc. A sole trader may have employees.

Benefits of registration with Bolagsverket

In many cases a sole trader must apply for registration with Bolagsverket before the business may begin operating. In other cases registration is optional. See further under the heading Obligation to register.

Bolagsverket believes that registration has a number of benefits. Registration provides a good basis for protecting your business name. Furthermore, registration makes it easier for customers, suppliers, authorities and others to get in contact with your enterprise. Suppliers and banks may also demand that you can present a certificate of registration.

Registration for tax

See our website verksamt.se for further information on e.g. compulsory registration of sole traders with Skatteverket (the tax authority) for tax, VAT and payroll-tax.

Registration by county

Bolagsverket registers a sole trader in the Trade Register (handelsregistret) for the county in which the business is carried on. Protection of the business name applies in that county. See also under the heading Protective registration.

Personal identity number (personnummer) as registration number

A sole trader uses his/her personal ID number (personnummer) as registration number – no special corporate identity number (organisationsnummer) is issued. See also under the heading Sole traders living abroad.

Auditor

Normally a sole trader does not need to register an auditor. However, large enterprises must have a qualified auditor and report him/her for registration with Bolagsverket.

When do you need an auditor?

The enterprise must have a qualified auditor if it meets at least two of the following criteria.
The enterprise has for each one of the two latest financial years had

more than 50 employees (as an average)
a reported balance sheet total of more than 40 million kronor
a net turn over of more than 80 million kronor.

Business name

To be approved, a business name must not be too general. For example, it must not merely describe the activities of the business.

It must not be too similar to the proposed or registered name of another enterprise in the same line of business.

A business name must not be misleading with regard to the geographical location of the enterprise or the nature of its activities. Words or abbreviations designating certain international organisations or names protected by copyright are not allowed.

Normally, the business name cannot include the family name of a person other than the sole trader.

The business name of a sole trader is not allowed to contain any words or abbreviations designating another form of enterprise or organisation.

Restrictions are mentioned in the Trade Names Act (Firmalagen) and in other statutes.

Be inventive

It is advisable to propose a number of names and they should be as varied as possible. If you list more than one name proposal we will consider them in the order you number them. The first one to be approved by Bolagsverket will be registered without further reference to you.

A business name may be constructed the following way

Fictitious word, e.g. Cajin
Fictitious word + word denoting the business activity, e.g. Wertex Plåt
First name and surname + word denoting the business activity, e.g. Bo Alms Snickeri
Initials + word denoting the business activity, e.g. CK Båt
Geographic name + word denoting the business activity, e.g. Storgatans Tobak

In Näringslivsregistret (the Swedish Trade and Industry Register) you can check already registered business names. Before submitting a proposed business name you may contact Bolagsverket on the phone for a preliminary check of whether the name is confusable with an existing business name.

Even if a proposed business name does not occur in our register, this does not necessarily mean that it is possible to register. On the phone we cannot offer a full examination according to the stipulations in the Trade Names Act, but just a quick search of the register.

Do not order stationery, signs, etc. until your business name is registered!

Business activities

When you apply for registration of your business you have to state the type of business you will be carrying on. Your business activities must be defined exactly to a special line of business, as for instance trade in children's wear, not just the word trade.

Other examples may be

Footwear retail business.
Automotive shop.
Systems design and computer programming within the IT line of business.

Secondary name

It is possible to register a special name, so-called secondary name, for a part of the registered business activities. A secondary name cannot apply to the total business activities, nor may it apply to such a large part of the business activities so that it would appear as a parallel to the main name of the enterprise. If the secondary name is used when signing on behalf of the enterprise, the main name of the business should be mentioned as well.

Protective registration

If you intend to carry on business in more than one county, you may register the business name in each of the counties concerned. This is known as protective registration (skyddsregistrering) and an extra fee is charged for each county. State on the form that the intent is protective registration.

Authorised signatory

An authorised signatory (firmatecknare) is a person having the authority to sign on behalf of the business with legally binding effect. In the case of a business run by a sole trader, only the sole trader can be the authorised signatory. See also under the headings Power of attorney, Power of procuration and Minors.

Power of attorney

It is often practical for some other person to be able to transact business at the bank and post office. You can arrange for this by issuing a power of attorney (fullmakt) that is restricted to this purpose only. Appropriate forms are often available at banks and post offices. Bolagsverket does not register these powers of attorney. However, if you want to give some person the power to do anything relating to the business, you can grant that person power of procuration – see under that heading.

Manager

If a person resident abroad wants to carry on business in Sweden, he must register a person resident in Sweden to be responsible for the business. This person is referred to as manager. Regulations apply as stipulated in the Foreign Branch Offices Act. The manager must be registered with Bolagsverket. See also under the heading Sole traders living abroad.

Obligation to register

Criteria for an enterprise to be regarded large

An enterprise fulfilling more than one of the following three conditions is regarded large and is obliged to register in the trade register:

The average number of employees of the enterprise must during each of the two most recent financial years have amounted to more than 50.
The reported balance-sheet total of the enterprise must for each of the two most recent financial years have amounted to more than 40 million Swedish kronor.
The reported net turnover of the enterprise must for each of the two most recent financial years have amounted to more than 80 million Swedish kronor.

Practically all sole traders may apply for registration with Bolagsverket. All that is required is that the business is carried on as an occupation (i.e. has a degree of permanence) and for profit.

Some sole traders are obliged to apply for registration before they can start doing business. Failure to do so is punishable by a fine.

Although it is difficult to give a full answer to when a sole trader is obliged to be registered in the particular case, it is ultimately the sole trader himself or herself who has to determine whether to apply to Bolagsverket for registration.

Minors

Persons under 18 years of age are minors (i.e. legally incompetent) and they are subject to certain restrictions. If a child is in the care of its parents, both parents are considered to have parental authority (they are "förmyndare"). If the child is in the care of only one parent, that parent has parental authority. If a minor has no parent exercising parental authority, the district court appoints a guardian (förmyndare) to have parental authority.

Persons under 16 years

A person under the age of 16 years cannot be a sole trader.

Persons aged over 16 but less than 18 years

A person who is over 16 but less than 18 years of age may be a sole trader with the consent of the persons with parental authority over him or her and that of the Public Guardian (överförmyndare) in the local authority concerned. The minor is registered as the business owner. The consent of the person(s) having parental authority for the sole trader and that of the Public Guardian should be included on the application form or attached to it.

Power of procuration

A power of procuration is a general power of attorney appointing a person to represent the sole trader and to sign on behalf of the business in all matters relating to it.

There are certain restrictions on a power of procuration, however. The procuration holder cannot without special authority transfer real property or a leasehold on land (tomträtt) belonging to or held by the sole trader. He cannot apply for a mortgage or grant rights over real property or leaseholds held by the business. A written power of procuration confers the right to represent the sole trader in court and before public authorities.

A power of procuration may be issued to two or more persons with the stipulation that it may only be exercised by them jointly – this is known as collective procuration. The procuration holder does not have to be registered with Bolagsverket in order for the power to be effective, but registration has practical benefits both for the sole trader and for the procuration holder, when doing business on his/her behalf. Restrictions on a power of procuration, such as that it applies only to bank business or to certain specific property, cannot be registered.

Additional information and attachments for the registration of procuration holders

If the power of procuration is issued in writing, the original or a certified copy must be attached to an application to register the procuration holder. In the case of a special authority or collective procuration, a description of its contents is sufficient. We also require personal particulars of the procuration holder and an original specimen signature witnessed by one person.

Sole traders living abroad

A person resident abroad (not legally domiciled in Sweden), who wishes to carry on business in Sweden, can register as a sole trader. To be entered into the trade register, he/she needs a 10-digit personal identity number or a registration number. Skatteverket (the tax authority) handles these questions. It may for example be a so-called co-ordination number (samordningsnummer) or a VAT number. A copy of the tax authority's decision must be attached to the application for registration with Bolagsverket.

The person resident abroad (not legally domiciled in Sweden), but carrying on business activities in Sweden, must register a manager for the business enterprise. The manager is responsible for the business in Sweden and must be legally domiciled (folkbokförd) in Sweden. He/she cannot be a minor, be declared bankrupt, be subject to trade ban, or have a custodian pursuant to the Parental Code. Registration of the manager and a power of attorney for him/her (certified copy) must be filed with Bolagsverket before the business activities can begin. The certified signature of the manager must be included in the application.

Demands on a sole trader

A person who wishes to register as a sole trader must not

be declared bankrupt,
be subject to trade ban or
have a custodian pursuant to the Parental Code

Certified signature

The application must in all cases be signed by the sole trader and (if appropriate) by the person(s) having parental authority over the sole trader. Specimen signatures of procuration holders, if any, must also be included. The sole trader's signature must be certified by one person, as must those of any procuration holders who are being registered. See also under the heading Power of procuration.

Registration on the Internet

By way of the webservice www.verksamt.se you can file your application electronically. Instead of a hand-written signature you use a digital signature.

Please observe that permission from the guardian/chief guardian (when applicable) must be forwarded to Bolagsverket by regular mail; this cannot be forwarded electronically.

Fees – New registration

The required fee must be paid when the application is sent to Bolagsverket. For fees, see Prices and fees for sole trader.

When paying through post, bank or your Internet bank, state the following information on the payment slip or in the message field: "New registration as sole trader" and the first name proposal.

Changes of previously registered information

If previously registered information has been changed, Bolagsverket must be notified to update the register, for example if changes are made of the line of the business activities or a change of an address.

Change of the enterprise address or the owner's address

Skatteverket (the tax authorities) or other authorities do not automatically forward changes of addresses to Bolagsverket's register. A change of address must therefore always be reported directly to Bolagsverket.

Change of procuration holder

When applying for change of a procuration holder the power of procuration must be forwarded in the original or as a certified copy if it is the matter of a written procuration. In the case of a special authority or joint procuration, a statement of the contents is sufficient. We also require the personal particulars of the procuration holder and an original specimen signature certified by one person.

Change of surname

A notice of change of surname must be accompanied by an original specimen signature of the person concerned. The signature must be certified by one person.

Change of the business name

If you want to change your business name, you should preferably propose several new names, as different as possible. When you submit more than one proposal, we shall examine them according to the priority given by you. Please note that we register the first acceptable proposal without contacting you first.

Moval to another county

Moval (of the enterprise) to another county involves striking off the business in the county where it has been operating and re-registration in the new county. This is considered a change of registered information, and consequently you should not use the form for striking off in this respect.

Once the change has been registered, the business name is only protected in the new county in which the business will be operating. In some cases you may have to change the business name because an identical or confusable business name already exists in the new county.

Striking off

Bolagsverket must be notified if a you want to strike off the enterprise from the register. The enterprise must also be struck off the register if it is being restructured to continue operating as another form of enterprise. Application for striking off a business is free of charge.

Fees – Changes