Sole trader | Companies guide

Content

Business activities carried on by a sole trader (enskild näringsidkare) can be regarded as a form of business enterprise, but not as a legal entity. The business is run by and represented by one person. As the owner of the one-man business, you are therefore given your own personal identity number as the registration number of the business enterprise.

Responsibility and risk

There is no economic dividing line between you and the business enterprise. This naturally involves certain risks. If the business loses money, you will have to use your private assets to cover its debts. You are unprotected financially, since you are personally responsible for all agreements entered into by the business. But it is still important to keep your private economy separate from that of your business.

A sole trader must keep accounts

The business must prepare accounts for each calendar year. Any income must be declared in an appendix to your own personal tax return.

Advantages of doing business as a sole trader

For one thing, you can start business on a small scale, without a large starting capital. For another, taxation differences between the one-man business and the limited company are being evened out. It is, for example, now possible for a sole trader to make an allocation of profits for future use. The deficit in a newly started business can also be set off against earned income or future surplus.

Normally, it is not compulsory to have an auditor who examines the business, but it can be wise to have a competent financial adviser.

Protection of business name

If you register as a sole trader your business name will be protected only in the county in which your business enterprise is registered.

Register the company via the internet

Use the webservice verksamt.se to register a sole trader. You can also use application form Registration of a new enterprise – sole trader, nr 903 e, which should be sent in the original.

A piece of good advice

Do not order any stationery, printed matter, signs, etc. until your business and the name you applied for have been registered.