Time to make your passion a reality? How fun! Starting your own business, also known as sole proprietorship, is one step closer to realizing your dreams and taking control of your future. It’s an exciting adventure that can open doors to a multitude of opportunities. We explain how to start a sole proprietorship step by step so you can begin the journey to becoming your own boss!
How does it work?
Using your mobile bank ID or the Swedish Tax Agency’s Business Registration form, you register to start a sole proprietorship with the agency’s e-service on the firm website verksamt.se. Several different pieces of information must be entered while registering a business.
It involves everything from how much you earn from your job (if you are going to start a business alongside your employment) to how much profit your company is expected to make. Of course, this is not always easy to know before you get started. If you are not sure of the number of kronor, it is enough to make an estimate of the amounts. However, be careful to get as close to the truth as possible.
What is required to start a sole proprietorship?
Below we summarize some important things to do when starting a sole proprietorship:
At the Swedish Tax Agency you can:
- Apply for F-tax or FA-tax
- Register if your business will be handling VAT.
- Register as an employer.
Register the company
Once your sole proprietorship has been approved for F-tax or FA-tax and has been registered for VAT, the Swedish Companies Registration Office must register your company. This may take a couple of weeks, depending on their processing times.
Register the company name
You may need to register the name with the Swedish Companies Registration Office, depending on the nature of your firm. The company’s name is so reserved in the county in which it operates.
Does operating a business require a permit?
Verify whether you require any special permits in order to operate your firm.
Cost to start a sole proprietorship
If you would like to have your company name registered with the Swedish Companies Registration Office, it is 1,200 kronor if you submit through their e-service.
There are few exceptions, but generally speaking, you are not required to register your business with the Swedish Companies Registration Office.
VAT per year, quarter or month?
If you have an estimated turnover of less than 1 million kronor per year, you can choose to report VAT annually, quarterly or monthly. Which is best for your company with a turnover of less than 1 million kronor depends on the number of business transactions you have during the year and the size of your business.
Generally speaking, smaller businesses are best suited for annual VAT, while larger businesses or businesses with many transactions need to report more frequently. You must select monthly VAT if your turnover exceeds one million dollars.
Are you going to hire?
You have to register as an employer when you hire someone for the first time. If you plan to pay salaries to someone who is not eligible for F-tax, you must take this action.
The date of the first salary payment, the number of salary payments made each year, the number of employees you plan to hire during the year, and the anticipated yearly compensation must all be entered when you register as an employer. After that, you will be required to complete an employer declaration, which is sent to the Swedish Tax Agency every month.
Tips for starting a sole proprietorship
As soon as you have started your sole proprietorship, you are required to keep accounts. This means that you must keep track of your papers and receipts and book them. You can leave this to an accounting consultant, but the responsibility is yours regardless of whether you do it yourself or hire help. With our accounting software , you can easily manage your accounting and even collaborate with an accounting consultant if you choose.
It is important that you know that when you start a sole proprietorship, you are personally responsible for the company’s finances, as this form of business is not a separate legal entity .