A look at corporate, personal and, where relevant, partnership insolvency proceedings in Sweden, with a brief description to explain key features, as part of our Dictionary of Insolvency Terms in EU Member States. In particular, we highlight who controls the procedure and whether it is likely to be accompanied by a moratorium to prevent enforcement.


Company reorganisation

  • Used when a company or a partnership is unable or likely to become unable to pay its debts (the substantive test).
  • The reorganisation lasts for 3 months with a possible extension of up to 12 months.
  • Usually combined with a public composition and is initiated by either: (i) a creditor; or (ii) the debtor, by applying to the district court.
  • If the court approves the application, the court will appoint an administrator (Sw. rekonstruktör). The debtor will retain control over its property during the reorganisation, but must consult the administrator, whose duty it is to protect the creditors’ best interests.
  • Secured creditors can take action to recover their debts during the reorganisation, but there is a moratorium on actions taken by unsecured creditors during the reorganisation. If the debtor acts in a way that jeopardises the creditors’ best interests during the reorganisation, the debtor can be declared bankrupt.

Offentlig ackord

Public composition

  • Used when a company or a partnership is unable or likely to become unable to pay its debts (the substantive test).
  • It is initiated by the debtor by applying to the district court.
  • The debtor will retain control over its property during the reorganisation, but must consult the administrator.
  • All unsecured creditors take part in the negotiations, while secured creditors and those who rank above the unsecured creditors do not need to take part in the public composition procedure as they will be fully compensated.
  • Public compositions must be accepted by at least 60-75% of the unsecured creditors for the district court to approve a public composition.
  • All unsecured creditors can be forced to accept a reduction of up to 75% (or more in certain circumstances) of the value of their claims.
  • In practice, public compositions usually take place together with company reorganisations.

Privat ackord

Private composition

  • A private arrangement proposed by a company or a partnership to reduce its debts.
  • An entirely voluntary procedure, which is not regulated by law. For example, there is no stay prohibiting secured creditor enforcement action; no time limits to comply with; no asset supervision or control (by the court or an insolvency practitioner)
  • All creditors must approve the composition.


Bankruptcy – legal entities

  • Initiated by either a creditor or the debtor (company or partnership) by filing a petition for bankruptcy with the competent local district court.
  • The applicant must prove that the company or partnership is insolvent (ie not only temporarily unable to pay its debts).
  • In practice, a bankruptcy petition submitted by the debtor is normally accepted by the court (ie the debtor is in such a case presumed to be insolvent).
  • Large-scale bankruptcies are time-consuming and usually last for many years while bankruptcy proceedings for smaller companies often are completed within one year.
  • The district court appoints a bankruptcy administrator (Sw. konkursförvaltare), who will take charge of the company or partnership and its assets.
  • A creditor’s financial claim should be filed with the district court and determined in the bankruptcy proceedings.
  • A statutory moratorium is imposed on all creditors and, generally, only a creditor holding a perfected security over a debtor’s assets pledge can continue to enforce its rights.
  • When the bankruptcy is finalised, the company or partnership ceases to exist.

Frivillig likvidation i kombination med ackord

Voluntary liquidation in combination with private composition

  • Initiated by the debtor (company or partnership).
  • Voluntary liquidations typically take between seven and 12 months.
  • The Swedish Companies Registration Office (Sw. Bolagsverket) (SCRO) appoints a liquidator (Sw. likvidator) who will take charge of the company or partnership.
  • The liquidator is able to call for unidentified creditors for a minimum period of six months by publishing an announcement in the Swedish Official Gazette (Sw. Post – och Inrikes Tidningar) and ask unidentified creditors to submit their claims. During this period, creditors must submit proof of their claims (an unproven unidentified creditor’s claim is generally invalid).
  • There are no substantive tests for voluntary liquidations and neither consent to nor approval of the procedure is required.
  • There is no stay prohibiting secured creditor action.
  • When the voluntary liquidation is finalised, the company or partnership ceases to exist.


Compulsory liquidation

  • Initiated by the SCRO, which appoints a liquidator.
  • The liquidator can also be appointed by a court order if the company (i) has not registered its board, managing director or auditor; or (ii) has not provided the SCRO with its annual audited report.
  • The liquidator will take charge of the company.
  • The liquidation typically takes between seven and 12 months.
  • There is no stay prohibiting secured creditor action.
  • When the compulsory liquidation is finalised, the company ceases to exist.
  • Compulsory liquidations also apply to partnerships.


Debt rescheduling – natural persons

  • The Swedish Enforcement Authority (Sw. Kronofogdemyndigheten) (SEA) decides if debt rescheduling should be initiated and, if so, the SEA will take charge of the procedure.
  • Creditor’s consent or approval of debt rescheduling is not required.
  • The debtor remains in control of their assets.
  • Claims by unidentified creditors are invited by public announcements and all debts are reduced.
  • Every unsecured creditor has an equal right to be paid. The SEA decides how much the debtor will pay each creditor. Secured creditors are not included in debt rescheduling and as such their security remains unaffected.
  • Debt rescheduling only applies for natural persons.

Personlig konkurs

Bankruptcy – natural persons

  • Initiated by either a creditor or the debtor by applying to the district court, which appoints a receiver.
  • Only a creditor holding a perfected security over a debtor’s assets can continue with bankruptcy enforcement proceedings.
  • The general rules of corporate insolvency apply to bankruptcy of natural persons.
  • The debtor may still be required to pay after the bankruptcy procedure has been finalised.

Secured creditor enforcement procedures

  • In the case of disputed claims, to enforce the payment of a loan or realise a security, an enforcement order must generally be obtained through the public courts or arbitration, as the claim itself is not enough.
  • Once the creditor has obtained an enforcement order and applied to the SEA or the bailiff, the borrower’s assets can be seized.
  • In the case of undisputed claims, there is a simplified bailiff procedure.

EU Directive Implementation

The EU Directive on Restructuring and Insolvency1 (Directive) requires Member States to incorporate minimum common standards into their national restructuring and insolvency laws by 17 July 2021, with an option to extend that deadline by one year. The intention of the Directive is to reduce barriers to the free flow of capital stemming from differences in Member States’ restructuring and insolvency frameworks, and to enhance the rescue culture in the EU.

Notable features required to be included in Member States’ national laws include:

  • An effective preventive restructuring framework to enable debtors experiencing financial difficulties to restructure at an early stage, with a view to preventing insolvency and ensuring their viability.
  • A stay of up to four months extendable to up to 12 months to support negotiations of a restructuring proposal, which should prevent individual enforcement action and include rules preventing the withholding of performance, termination, acceleration or modification of essential contracts.
  • An ability to cram down dissenting classes of creditors.
  • Adequate protection for financing needed to allow the business to survive or to preserve the value of the business pending a restructuring, and for new financing necessary to implement a restructuring plan.
  • Provision for honest, insolvent entrepreneurs to have access to a procedure that can lead to a full discharge of their debts (subject to limited exceptions) within three years.

Implementation in Sweden

The Directive has not yet been implemented in Sweden. Before the Government can draw up a legislative proposal to be laid before the Swedish Parliament, the matter in question must be analysed and the reports are published in the Swedish Government Official Reports series (Sw. Statens Offentliga Utredningar, SOU). The proposed amendments of the Swedish insolvency laws, as a consequence of the Directive, have been included in the Swedish Government Official Report SOU 2021:12 (Andra chans för krisande företag – En ny lag om företagsrekonstruktion).

The Swedish Government Official Report SOU 2021:12 proposes substantial amendments of the Swedish insolvency laws, especially concerning company restructuring. In summary, the Swedish Government Official Report SOU 2021:12 includes the following features.

  • A permanent national business emergency support centre to be established with focus on micro, small and medium-sized enterprises.

EU Directive Implementation

  • A new company restructuring act.
  • Public debt settlement procedure and expedited process for debt write-offs.
  • A concentration on fewer courts.
  • Stricter supervision standards for company restructurings.

The proposed amendments are extensive. It is proposed, among others, that the Swedish Company. Reorganisation Act (Sw. Lag om företagsrekonstruktion) should be repealed and replaced by a new act. The principal new feature in the Swedish Government Official Report SOU 2021:12, which is based on the Directive, is that not only the financial settlement (ie the composition arrangement (Sw. ackordet)) but also other measures to address a company’s financial problems can be confirmed in a restructuring plan and thus become binding. For example, the restructuring plan may require a change of the governing board or the chief executive officer as a condition for refinancing. The court should thus be able to confirm the restructuring plan in its entirety.

At the same time, the Swedish Government Official Report SOU 2021:12 includes a proposal to introduce an alternative procedure in which debt settlement can be confirmed without being part of a restructuring plan (public debt settlement). The rationale for a public debt settlement procedure is the need for a quicker, simpler and cheaper procedure for cases where the debtor only needs a debt settlement to make their enterprise profitable again.

Other new features are that the debtor should have the right to terminate long-term contracts during the restructuring period and an express prohibition of ipso facto clauses (ie contractual conditions that grant a party the right to cancel a contract because the other party applies for or commences a company restructuring procedure).

The Swedish Government Official Report SOU 2021:12 concludes that there are significant differences between restructuring administrators who are also bankruptcy administrators and those who are not. An investigation by the SEA shows that rate of successful restructuring differs sharply between different categories (50 percent successful restructurings for bankruptcy administrators, compared with 7 percent for other receivers and administrators). Consequently, the Swedish Government Official Report SOU 2021:12 proposes stricter supervision standards for restructurings and requirements for the appointment of administrators.

The Directive has not yet been implemented in Sweden and the proposed amendments in the Swedish Government Official Report SOU 2021:12 is still a proposal and may thus be revised.

Implementation date

The proposed implementation of the Directive, which will be incorporated into Swedish legislation, is expected to come into force on 1 July 2022.

Recognition of foreign insolvency processes

EU regulation on insolvency proceedings

The EU Regulation on Insolvency Proceedings2 (Regulation) applies to all EU Member States, except Denmark, and requires that certain collective insolvency proceedings, which are listed in Annex A to the Regulation, occurring in one EU Member State are automatically recognised in all other EU Member States and that each EU Member State automatically recognises the powers and authority of an insolvency practitioner appointed in another EU Member State.

Recognition of third country insolvency processes

Third country insolvency processes (ie commenced outside the EU) are not automatically recognised under Swedish law. As a consequence, third country insolvency processes do not preclude the opening of insolvency proceedings in Sweden and assets located in Sweden are not automatically ring-fenced by such proceedings. Parallel insolvency proceedings and special enforcement measures may thus be commenced in Sweden. At the same time, a foreign bankruptcy estate, which has legal capacity under a foreign jurisdiction, is considered to have legal capacity in Sweden. A foreign bankruptcy estate may thus enter into agreements in Sweden and act as party in legal proceedings, including insolvency and enforcement processes.

Insolvency changes in response to COVID-19

For more information on changes to insolvency law in Sweden as a result of the COVID-19 pandemic please see our Guide to changes in insolvency law in response to COVID-19.

Contact: Kent Hägglund

Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive (EU) 2017/1132.
2 Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast).