Compare private and public Swedish limited companies: share capital, boards, share registers, distribution restrictions and changing category.
All Swedish limited companies are either private or public. This follows directly from Chapter 1, Section 2 of the Swedish Companies Act (ABL). The distinction concerns who the company may approach to raise capital — not whether its shares are traded on a stock exchange. A public company can be entirely unlisted, and most growth companies with many shareholders are still private.
This article explains what the Act says: the rules that apply to all limited companies, where the requirements differ, and what is needed to change category.
Both categories share the same foundation in the Act: articles of association, a share register, general meetings, a board of directors, capital protection and minority protection. Public companies face additional requirements. If the company lists, market rules apply as well.
Private or public describes the company category under the Act. Listed or unlisted describes the trading venue — whether the shares trade on a regulated market or trading platform.
| Category | Unlisted | Listed | | --- | --- | --- | | Private | The most common limited company. Subject to restrictions on distributing shares. | Not possible: a private company's shares may not trade on a regulated market or another organised marketplace (Chapter 1, Section 8). | | Public | A company raising capital from the public or preparing a listing, whose shares are not traded. | Stock exchange companies and companies on platforms such as First North or Spotlight. |
In short: all listed companies are public, but not all public companies are listed.
The foundation is the same. The Act applies to all limited companies unless stated otherwise (Chapter 1, Section 2), and most provisions do not distinguish between categories. Both private and public companies must:
Board work, share issues and shareholder rights therefore function in fundamentally the same way. The differences consist of additional and stricter requirements for public companies.
The decisive difference is that a public company may approach the public to raise capital. In return, the law imposes higher requirements for capital, organisation and transparency.
| Area | Private limited company | Public limited company | | --- | --- | --- | | Offering shares to the public | No: distribution restrictions (Chapter 1, Section 7) | Yes | | Trading on a marketplace | No (Chapter 1, Section 8) | Yes, but a central securities depository arrangement is required | | Minimum share capital | SEK 25,000 (Chapter 1, Section 5) | SEK 500,000 (Chapter 1, Section 14) | | Company name | Must not contain “publikt” or “(publ)” | “(publ)” after the name unless public status is already apparent (Chapter 3, Section 11) | | Board | At least one director; a deputy if there are fewer than three | At least three directors, with a majority elected by the general meeting (Chapter 8) | | Chair | Required if there is more than one director | Always | | Managing director | Optional | Mandatory (Chapter 8) | | Auditor | Smaller companies below the thresholds may opt out (Chapter 9, Section 1) | Always required | | Notice period for the annual general meeting | Six to four weeks; the articles may shorten this to two weeks (Chapter 7, Section 18) | Six to four weeks; cannot be shortened | | Method of notice | According to the articles, usually letter or email | Post- och Inrikes Tidningar, the company's website and an advertisement in a national daily newspaper | | Acquisition of own shares | Generally prohibited (Chapter 19) | Permitted under certain conditions (Chapter 19) | | Directed issues to related parties (Leo rules) | Do not apply unless the company is a subsidiary of a public company | Apply (Chapter 16) |
The table shows the most common differences, not every rule. The articles of association may also impose stricter requirements in either category.
A private company and its shareholders may not advertise to distribute shares, subscription rights or other securities in the company. Nor may they offer more than 200 people the opportunity to subscribe for or purchase them (Chapter 1, Section 7). The prohibition covers both new issues and shareholders' own sales.
The law provides three exceptions:
The pre-registered group exception makes it possible for private companies to raise capital through investor networks and crowdfunding platforms. Platforms must have authorisation under the EU crowdfunding regulation (ECSP), but the regulation does not remove the Act's distribution restrictions. A company wishing to reach a broader audience needs to become public.
If a private company breaches the prohibition, a court may prohibit the action subject to a conditional fine.
A company changes category by amending its articles of association and registering the change with Bolagsverket. It retains its organisation number, and the change takes effect on registration. The rules are in Chapter 26 of the Act.
The requirements are:
The requirement is stricter because minority shareholders may lose opportunities to sell their shares. The resolution must be supported by the shareholders present, who together must represent at least nine-tenths of all shareholders in the company.
Many companies become public some time before a listing or larger fundraising round. This allows time to establish the board, reporting and ownership records before market requirements apply.
When a public company lists, the Companies Act is not sufficient on its own. Additional rules govern its relationship with the market:
An unlisted public company is outside most of these rules, but prospectus rules may apply when it offers shares to the public. It is governed by the Act, its articles and any shareholders' agreements — just like a private company, but with the stricter requirements described above.
Consider becoming public if any of these apply:
Remain private if capital comes from founders, business angels, funds or a pre-registered group. This provides more flexibility in the articles and lower administrative requirements.
Regardless of category, the company needs an accurate, up-to-date share register. The board is responsible in both cases.