I have been through his own experience in contact with entrepreneurs in various forms in Sweden. The greatest experience I have, by having been the President, owner and CEO of Golf innovators still EverTee, an economic association.

This post is about legal forms and their advantages and disadvantages.

Different types of company

There are different types of companies including sole proprietorship, partnership, limited partnership, limited liability companies and economic associations are those that are most common in Sweden. The different legal forms differ in their scope, inter alia, in accounting duty, the tax system as well as the responsibilities of owners. To understand this it is first and foremost important to understand the concept of legal personality.

Legal person

A legal entity may enter into contracts, acquire rights and assume obligations. This means that no ordinary person with a personal need to conclude agreements for the company, but may be characterized by the firm. A person employed by a corporation acting thus the limited company's corporate identity, not their own personal identity.

A legal person may also be given a different name other than social security number.

Sole trader

All companies are not legal persons, individual enterprise is one such example. A sole trader or traders, which is also called, enters into a contract in his own personal identity. This charge authorized signatory for the company's commitment to his fortune. It carries a risk of authorized signatory to lose private assets of the firm would go bankrupt.

Examples

For example, if Lasse life is a sole proprietorship, where Lasse is signatory, and his employees Konny enters into an agreement under which the firm goes bankrupt do not do this Konny under no obligation (provided that he has acted a bad thing). It becomes instead Lasse who will be responsible for the mistake!

A private company has no obligation to prepare the financial statements, however, the accounting firm of duty. A private company has an F-tax.

Partnerships

Trading driven by two or more members. The shareholders are responsible with their entire assets of the company's commitments, which carry the same risks for the individual firm. The shareholders may consist of legal or natural persons. The business entity is in contrast to the individual firm a legal person, which means that the contracts in the firm's name and that the firm may be given a separate name. The business entity has accounting duties.

Limited partnership

The limited partnership works just like the partnership. The difference is one or more partners are only liable with their debts in the company, while one, the general partner, is responsible with their entire assets of the Company's obligations.

Ltd

Company is a bokföringspliktig legal entity. Company has a registered capital of 100 'kr for a private and 500' SEK for a public company. The shareholders, who paid share capital, are those that represent the company's risks. That is the only thing that can happen is that they lose their action when the company goes bankrupt. No personal accountability. The owners are investing in the company in hopes of getting the distribution of profits and growth in value of their shares. The owners may vote at the AGM in relation to their shareholdings.

The owners are voting on a board at the AGM. The Board has responsibility for the company and appoint an operational management for the business, in which he was President, Chief Executive, is included.

Of course there are laws governing how companies are governed. The board is such a duty to inform themselves about how the company is headed.

Economic Association

The economic association's business name is signed by at least three persons jointly. The association has members with one vote each. Like the corporation, the members are only responsible to its membership stake in the company. Economic associations, like the limited liability company required to prepare financial statements and annual reports each year.

Because the compound owned by the members, unlike the limited liability company difficult to sell. The annual profit is usually distributed to the members or be placed in the company.

What should you consider when you decide to start a business?

Economic associations and limited liability companies are the forms (part of a limited partnership) where the owners are personally liable for company obligations. These forms are the most complex and require annual reports and most bureaucracies, they are also more difficult to liquidate if it were granted. Company has the advantage of being more easy to sell against an association.

All enterprises except limited liability company is easy to start and requires no major investment. Remember that to get a company to roll, it often requires a certain amount. Often, you can also come away a bit cheaper than the 100 'kr, by buying your company at auction.

Trading partnership, cooperative association, limited partnership requires more than one person signs the firm. Think about it, and the possibility of being at loggerheads with your partner. It can be particularly devastating for a partnership, since both members are responsible with all his wealth. Limited liability companies and sole proprietorships do not have these problems.

There is every reason to think about when to start a business. What extent should it be? How many will be with? Will it sell? Do we want to be responsible with all our wealth or not? Please contact me if you want more views on the subject. In the next post, I will take up the opportunities, difficulties and problems when a company is liquidated.