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Sole Proprietorship or Limited Company? An Honest Comparison

The most common question new business owners ask: should I register as a sole proprietorship or a limited company? The answer depends on what you do and how much you turn over.

A sole proprietorship suits you if you're testing an idea, have low turnover (under SEK 800,000/year), and want to keep things as simple as possible. The downside: you're personally liable for the company's debts.

A limited company suits you if your clients require it, if you plan to hire employees, or if you turn over more than SEK 800,000/year. The upside: limited personal liability. The downside: more administration, share capital requirement (SEK 25,000) and audit requirements.

Our advice? Start with a sole proprietorship. It takes 20 minutes to register and costs nothing. If the business grows, you can always switch to a limited company later. Starting with a limited company "just in case" means unnecessary admin when you should be spending time getting customers.

The exception: if you're building tech, handling large sums, or taking outside investment, start with a limited company from day one.

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