Sole business proprietors
Requirement to maintain accounting records
A natural person residing in Sweden who conducts business activity is required to maintain accounting records for such activity. The requirement to maintain accounting records implies that a sole business proprietor (enskild näringsidkare) must comply with the Book-keeping Act (bokföringslagen) and the standards of the Swedish Accounting Standards Board (BFN). This means that
- all business transactions must be recorded on a current basis,
- there must be supporting vouchers for all accounting entries,
- accounting information must be archived in an orderly state and in a satisfactory and transparent manner in Sweden for seven years, and
- annual financial statements must be prepared for each financial year.
Rules regarding the current recording of transactions, supporting vouchers and archiving, etc. are provided in the BFN guide Bokföring.
Book-keeping can be performed manually or using book-keeping software. For manual book-keeping, BFN has prepared entry sheets that can be printed and used for book-keeping. Own entry sheets may also be used, or a purchased multi-column journal. It is not permitted to perform book-keeping using software in which registration can be amended retroactively, such as Excel.
Simplified annual accounts
Sole business proprietors with net sales that normally amount to no more than SEK 3 million annually are permitted to prepare simplified annual accounts (förenklat årsbokslut). Simplified annual accounts must be prepared according to the K1 rules of BFN – Enskilda näringsidkare som upprättar förenklat årsbokslut (BFNAR 2006:1).
BFN has, together with the Swedish Tax Agency (Skatteverket) prepared the brochure Bokföring, bokslut och deklaration, del 1 (SKV 282) which, in simplified terms, describes the rules for sole business proprietors who choose to prepare simplified annual accounts. BFN and the Swedish Tax Agency have also prepared a form, Förenklat årsbokslut – Enskilda näringsidkare (SKV 2150), for simplified annual accounts and supporting documents for financial statements, bokslutsunderlag, that may be of assistance in preparing simplified annual accounts. On the Swedish Tax Agency’s website, a program is available that can be used for preparing simplified annual accounts.
K1 – Enskilda näringsidkare som upprättar förenklat årsbokslut, Swedish version
Bokföring, bokslut och deklaration, del 1 (SKV 282), Swedish version
Form for simplified annual accounts (SKV 2150), Swedish version
Supporting documents for financial statements (SKV, Swedish version)
Simplified annual accounts online (SKV, Swedish only)
Annual financial statements
For sole business proprietors who may not, or who choose not to, prepare simplified annual accounts, the rules apply of the Book-keeping Act regarding annual financial statements (årsbokslut). The annual financial statements shall be prepared according to the “K Regulations” Årsbokslut (BFNAR 2017:3). The regulations provide conditions for preparing annual financial statements in two ways: either applying the simpler rules in the regulations – the “K2 Rules”, or applying point 1.7, which enables certain companies to apply the rules in K3 – Årsredovisning och koncernredovisning (BFNAR 2012:1).
K2/K3 – Årsbokslut, Swedish version.