Sole trader

A sole trader, or an unincorporated business, is the most common company structure among professional artists. This company structure suits many people thanks to minimal administration and low costs to get started. There is no special start-up capital needed beyond what the business requires.

You are liable for the company’s debts and contracts

A sole trader company is not a legal entity like a limited liability company. This means that you are personally liable for all of the company’s obligations, such as debts and agreements entered into. It is you as a private individual, and not the company, who rents premises or is a party to a court process. Thus, you also have to pay the company’s debts if the company’s assets are not sufficient.

No need to register

A sole trader company does not need to be registered with the Swedish Companies Registration Office (Bolagsverket). You declare the income or profit/loss from your business activities in a business appendix (NE) in your own income tax return.

Easy and inexpensive administration

An advantage of a sole trader company is that the administration is simple and inexpensive. No special start-up capital is needed beyond what the business requires.

Special VAT rules

It is only in a sole trader company that a visual artist can sell works of visual art that are exempt from VAT or with only 12 percent VAT. Similarly, a musician, dancer or actor, for example, is exempt from VAT provided that they perform copyright-protected works in front of a live audience.

Create clarity – for your financial security and peace of mind

It is important to be aware of two things in particular when setting up a sole proprietorship:

• Don’t mix your personal finances with your company’s. It can be hard to understand the difference between the company’s money and your own because the sole trader company is not a separate legal entity. Think this through, and create clear structures for your own and your company’s finances.
• Familiarise yourself with what you need for a sense of security. The systems and rules for sickness and parental benefits, pensions and unemployment insurance are primarily designed for people who are employed. Contact the Swedish Social Insurance Agency (Försäkringskassan) and the Unemployment Insurance Fund (A-kassan) you are affiliated with for more information.