About sole traders

A sole trader (enskild näringsidkare) is a person who runs a business on his or her own.

Requirements on a sole trader

If you want to register as a sole trader, you must

  • be over 16 years of age
  • have a Swedish identity or co-ordination number.

You must not

  • be declared bankrupt
  • be prohibited from carrying on business
  • have a custodian.

Management

As a sole trader you work for yourself and you make all decisions concerning your business. You can employ people to help run the business.

Finances

There is no demand for a start-up capital for sole traders. All profits are yours after you have paid income tax to The Swedish Tax Agency (Skatteverket).

Working for yourself means you cannot claim benefits such as sick pay or holiday pay. You need a private insurance to make sure you are properly covered if you fall ill. You may also need business insurance to protect your business against damage or injury claims.

Keeping accounts is fairly easy for sole traders. Just make sure that you keep record on income and expenses, and that you keep your private and business records separated. Setting up a business bank account may make this easier.

Liability

You are personally liable for keeping contracts, paying debts and income taxes. You may have to use your personal assets to settle business debts if your business falls into trouble.

Permits

Some business activities are regulated. Make sure at an early stage of your business planning that you have the right authorisation for the activities your business will carry out. Use the interactive tool on the verksamt.se website to find out if you need a permit or not.

Advantages and disadvantages

All business structures have advantages and disadvantages. Here we have listed some of them:

Advantages

  • You are your own boss.
  • There are no requirements of a start-up capital.
  • The record keeping and accounting is rather straightforward.

Disadvantages

  • You are personally responsible for all business debts.
  • Since a sole trader is unincorporated it may limit borrowing.
  • You need private insurance in case you fall ill.

E-services

Find permit (verksamt.se) External link.

Verksamt.se External link.