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Private company

What is a private limited company?

In Sweden, limited companies are divided into two categories: private limited companies (AB) and public limited companies (publ). The vast majority of unlisted companies and early-stage startups operate as private limited companies.

Requirements and rules

  • Share capital: Minimum requirement of 25,000 SEK in starting capital.
  • Investments: A private company may *not* offer shares or distribute advertisements about share purchases to the general public.
  • Board & Management: The rules for the board and CEO are not as strict as for public companies (for example, there is no legal requirement to have a CEO, and the board can get by with fewer members).

FAQs

Since private companies are not allowed to address the general public, investments in private companies follow rigorous regulations. This mainly means Private Placements, or so-called 'safe harbor' exceptions, where the offer is directed specifically to the investor and therefore is exempt from the prospectus requirements.

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