Limited liability companies are owned by their shareholders and regulated by the Swedish Companies Act. The Act regulates how certain decisions are made, how value transfers from the company (e.g. dividends) shall be divided between the shareholders and etc.
The formal decisions in limited liability companies are made by:
- The shareholders at shareholders' meetings
- The board of directors which are appointed by the shareholders' meeting.
- The CEO which is appointed by the board of directors or the shareholders' meeting.
Limited liability to refers to the fact that the shareholders cannot lose more money than they have invested in the company. If the company fails to pay its debtors, none of the company's liabilities or obligations will be transfered to the shareholders.