The Ministry of Justice is responsible for the fundamental legislation concerning companies.
There are different kinds of companies. The most common are:
- non-trading partnerships
- trading partnerships
- limited partnerships
- limited companies
Rules concerning non-trading partnerships, trading partnerships and limited partnerships are found in the Partnership and Non-registered Partnership Act (1980:1102). Rules concerning limited companies are found in the Companies Act (2005:551).
A distinguishing characteristic of a limited company is that the business is run without the partners (shareholders) having personal responsibility for the company's debts. Instead, the company is required to have a certain amount of share capital as security for its debts. In a private limited company there must be share capital of at least SEK 50 000, and in a public limited company, it must be at least SEK 500 000. Limited companies must be registered with the Swedish Companies Registration Office.
A new Companies Act
A new Companies Act entered into force on 1 January 2006. The new Act marks the end of a major company law reform that has been in progress for several years. The aim has been to create a modern and efficient set of regulations for Swedish companies. This reform process has been based on the proposals presented by the Company Law Committee.
The EU and company law
There are several EC Directives in the area of company law, and new proposals are being drafted in the Council and in the Internal Market and Services Directorate-General of the European Commission. The goal is to create a level playing field for companies located in different EU countries. Sweden is actively taking part in this work. The EU has also decided to create a special European form of company called a European Company, which can be established and operate in all EU member countries.
In recent years, questions concerning corporate governance and corporate control have attracted an increasing amount of attention, both in Sweden and internationally. In Sweden, questions of this kind have been dealt with by such bodies as the Commission on Business Confidence. The Commission presented its findings in April 2004 in the report The business sector and confidence (Näringslivet och förtroendet, SOU 2004:47).
The Commission on Business Confidence also took the initiative for establishing a special working group, called the Code Group, with the task of drafting a Swedish Corporate Governance Code. The result of the group´s work is presented in the report Swedish Corporate Governance Code (Svensk kod för bolagsstyrning, SOU 2004:130).