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[ESTABLISHING A BUSINESS ENTITY IN SWEDEN]
Companies. It is the predominant way forward for all businesses in Sweden and a very flexible and well-regulated form of association. To establish your Aktiebolag it is possible to either form the company or to acquire an “off - the- shelf” company, sometimes referred to as a “ready to use company” and, depending on the intended use, a “BidCo” or “SPV.” The preferred method of establishing your business depends on your needs, e.g., the need to enter into contracts with short notice. During office hours it is, generally speaking, possible to acquire an off the shelf company with authority to sign on behalf of the company within a day. Formation To form an Aktiebolag, the founders (shareholders) must initially draw up a memorandum of association and articles of association. One or more of the founders subscribe for the chosen number of shares in the company. The shares are paid for by making a payment into a bank account which the company needs to set up in advance of the Aktiebolag being registered. The board of directors (normally 1-3 persons with or without deputies – please refer to the section on viable board compositions below) thereafter applies for registration of the Aktiebolag with the Swedish Companies Registration Office within six months of the signing of the memorandum of association. Under certain conditions, shares may also be paid for by means of a non-cash consideration. The application to form the Aktiebolag shall include the articles of association and either a bank statement noting the share capital has been paid in full, or a statement from an auditor, if the shares have been paid for by a non-cash consideration. Legal requirements In the following section we will introduce
various legal requirements on, e.g., the composition of the board of directors. Should you not be able to satisfy one or more of the following criteria, Hellström Law are generally able to provide assistance, e.g., by providing virtual office services. An Aktiebolag must have an authorized representative residing in Sweden who can accept service of process on behalf the company (a “Process Agent,” Sw. Särskild Delgivningsmottagare). If the company has no authorized representative who is a Swedish resident the board of directors shall authorize a person who is a Swedish resident to act as Process Agent. The company must also be registered at an address which may be the home of a director, for example, should the company not have the need for an office building. Residency requirements Regarding residency (note, not citizenship), the managing director and any deputy managing director of a limited company must reside within the European Economic Area (EEA). Half of the company’s ordinary directors must also reside within the EEA and the same rule applies separately for the deputy directors, i.e., having one EEA resident ordinary member and one non-EEA resident deputy director is not a viable board composition. By law, the board of directors represents the company and is authorized to sign on behalf of the company. In addition, the managing director, which is an optional appointment, has the right to sign on behalf of the company concerning the day-to-day management of the company, pursuant to guidelines and instructions that may be issued by the board of directors. For practical reasons, it is common that signatory powers are vested in one or more
ILN Corporate Group – Establishing a Business Entity Series
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