Handelsbolag

Handelsbolag, abbreviated HB, is a form of business partnership used in Sweden by two or more persons to operate a business under a common name. It is not a separate limited company; instead, the partners collectively run the business, share profits and losses, and are responsible for the obligations of the partnership.

Formation and name

An HB is formed through a partnership agreement between the partners and is typically registered with the Swedish Companies Registration Office (Bolagsverket) to protect the name and establish the partnership officially. The firm’s name generally must indicate Handelsbolag or HB.

Liability

A defining characteristic of a Handelsbolag is the liability of its partners. All partners have unlimited personal liability for the debts and obligations of the HB. Debts can be claimed against any partner, and partners may be required to cover the full amount owed by the partnership.

Management and governance

Management is normally shared among the partners, with decisions made collectively unless the partnership agreement designates certain partners or managers with authority. Profit distribution and other key terms are typically outlined in the partnership agreement.

Taxation and accounting

The HB is generally not taxed as a separate entity. Instead, profits and losses pass through to the partners, who declare their share on personal or business tax returns and pay applicable taxes and social contributions. The HB must keep proper accounting records and prepare annual accounts; reporting obligations depend on size and local regulations.

Dissolution and changes

A Handelsbolag can be dissolved by agreement, withdrawal or death of a partner, or insolvency. When dissolved, assets and liabilities are settled among the partners according to the partnership agreement and legal rules. New partners can join or existing ones leave, subject to agreement.