Background
To balance the absence of personal liability for shareholders, the Companies Act, 2005:551, contains rules guaranteeing that a limited company always has assets that at least cover the company's liabilities. The requirement for share capital is a fundamental part of this so-called capital protection.
Since 1 April 2010, the minimum share capital for a private limited company has been SEK 50,000. Prior to this, the requirement was SEK 100,000 in share capital.
Proposal for a new limit of 25,000 kronor
In a memorandum from the Ministry of Justice, a reduction of the minimum share capital from 50,000 to 25,000 kronor is now proposed. The proposal is based on an agreement between the government, the Centre Party, and the Liberal Party.
The memorandum outlines several reasons for reducing the share capital, including in order to make the limited company form more accessible and thus promote entrepreneurship, particularly within the service sector.
Furthermore, the proposal is being made because developments in our Nordic neighbours and the rest of Europe have progressed significantly in this direction, and Sweden should not deviate significantly from the rest of the world. The share capital requirement should be determined in such a way that it facilitates entrepreneurs starting and running limited companies as much as possible.
Share capital of SEK 50,000 offers little protection for creditors, but the requirement for a certain minimum share capital can prevent completely ill-considered company formations and the use of limited companies for unjustified purposes. Therefore, the parties involved believe that a requirement for a certain minimum share capital should be retained.
Entry into force
The new lower share capital requirement is proposed to enter into force on 1 January 2020. The current requirement of SEK 50,000 shall apply to limited liability companies that have been formed but not registered as of 1 January 2020.
Source: Wolters Kluwer – Tax Information
