Winding up - Sweden

Updated 01/2011

Legal requirements

Regulations for the liquidation of limited companies can be found in the Limited Companies Act. Regulations for the liquidation of partnerships and non-registered partnerships can be found in the Partnerships Act. The financial consequences come under the Income Tax Act.

Limited Companies Act
Partnerships Act
Income Tax Act

Liquidation

Liquidation is the winding up of a company where the assets (where needed) are converted into cash, debts are paid and any surplus is distributed.

When filing for bankruptcy is the only option left for a business owner, it pays to cut losses, initiate proceedings sooner rather than later, and move on to a new business project.

Bankruptcy — Sweden

Administrative procedures

Winding up and deregistration

Limited companies

When a company goes into liquidation, it is represented by its board and managing director (MD) until a liquidator has been appointed. In most cases, it is the Swedish Companies Registration Office that decides who will be the liquidator for a limited company.

After that, the company is represented by the liquidator who replaces the board and the MD, and carries out the liquidation, i.e. winds up the company until it is dissolved.

Voluntary liquidation is decided upon at a general meeting. The general meeting decides whether liquidation should be immediate or on a specific date.

Liquidation may also be decided upon by a court or the Patent and Registration Office, in which case it is referred to as compulsory liquidation.

The liquidation decision must be submitted to the Swedish Companies Registration Office, and a fee has to be paid.

Deregistration fee

Documentation on the decision should include details of:

the reasons for the liquidation;
the date on which the company proposes to enter into liquidation;
the estimated date of the distribution;
the estimated size of the distribution;
any proposals to the liquidator.
More on the liquidation of limited companies

Business operations must also be deregistered as a taxable entity at the National Tax Board. This can be done via the online services provided by the Swedish National Tax Board on verksamt.se.

Swedish National Tax Board: information on taxes
verksamt.se

Economic association

Economic associations are normally wound up or dissolved via liquidation.

This involves assets being used to pay debts, and any surplus is distributed in accordance with the articles of association.

The association can go into liquidation on the basis of a decision taken at the general meeting of the association, or a decision taken by the district court or the Swedish Companies Registration Office. The board and the managing director become inactive immediately and are replaced by one or more liquidators.

Liquidation of an economic association

If a report concerning an economic association has not been submitted to the registration authority during the past 10 years, the Companies Registration Office can investigate whether the association is still conducting business. If it is not trading then it is removed from the register by the Companies Registration Office. The association is thereby dissolved.

For a decision of the general meeting on voluntary liquidation to be valid, it is required either

that all those qualified to vote in the association were present at the general meeting of the association and voted for the decision; or
that the association made the decision at two consecutive general meetings, the first one with a simple majority and the second with a two-thirds majority of voters. If there are reasons for compulsory liquidation, only a simple majority is required at the general meeting of the association.

Once a decision has been taken, it must be reported to the Companies Registration Office.

Partnerships

Liquidation can be managed by the partners or by the liquidator, an external individual selected by the district court who is usually a solicitor.

The company's debts are paid and business operations wound up. Any surplus is divided up among the partners.

When a decision to go into liquidation has been made, the words "in liquidation" must be included in the partnership's official name. The partners are also obliged to report this information to the Patent and Registration Office (PRV).

Patent and Registration Office

After liquidation, the company should be deregistered via the online service provided by the Swedish Companies Registration Office on verksamt.se.

Sole traders

A sole trader ceases business when its owner takes over the assets of the business.

This is classed as an own withdrawal from the business, and must be submitted for tax purposes.

The withdrawal must be entered into the books and verified with regard to the assets and debts affected and their value. The withdrawals must be entered in the accounts no later than the end of the month after the business is terminated.

A sole trader registered with the Companies Registration Office must be deregistered.

This can be done via the online services provided by the Swedish Companies Registration Office on verksamt.se.

verksamt.se

Information regarding the cessation of business operations must also be sent to the National Tax Board. This authority will remove the company in question from its VAT and corporation tax registers.

Swedish National Tax Board

The accounts must be closed in the normal way. The company's debts to suppliers and outstanding taxes must be paid and a final tax return for the business must also be submitted.

Resources

Further information on the liquidation of companies can be obtained from the Swedish Companies Registration Office and the business portal verksamt.se.

Swedish Companies Registration Office
verksamt.se

Check also the legislation on this topic in:

Winding up - Sweden