Bankruptcy of an economic association
If an association is unable to pay its debts, it must go bankrupt.
Important points for bankruptcy of an economic association
1. Apply for bankruptcy
The association can file for bankruptcy themselves as well as someone you owe money to (a creditor). The application is sent to the district court in the place where the association has its seat. The district court decides on bankruptcy and appoints a bankruptcy trustee. The district court notifies the Swedish Companies Registration Office, which registers that the bankruptcy has been initiated.
The bankruptcy trustee takes over and manages the association's assets and liabilities. It is the bankruptcy trustee who decides whether the business should continue.
Apply for your own bankruptcy - for a legal person at Swedish Courts (in Swedish)
Debts that have not been paid
The person who represents the association, can become personally responsible for unpaid taxes and fees if the association has been careless with payments, acted intentionally or grossly negligently.
Payment responsibility for legal entities at the Swedish Tax Agency (in Swedish)
2. The Swedish Tax Agency deregisters
The Swedish Tax Agency receives a notification that the bankruptcy has been initiated. Then the association's F-tax will be revoked and you will be deregistered from VAT and as an employer.
Debited preliminary tax
The Swedish Tax Agency will terminate the debited preliminary tax from the bankruptcy date. If the association wants to change the debiting for previous periods, you can request a review by submitting a preliminary income declaration.
Submit declarations
You, as a representative of the association, are obliged to submit all income, VAT and employer declarations until the day the association was declared bankrupt. Then a bankruptcy trustee takes over the accounting.
3. Report in partners' income tax return
The shares are considered sold on the day the association was declared bankrupt, i.e. on the onset of bankruptcy. The capital loss on qualified shares in close companies is reported on the Swedish Tax Agency's form K10.
Download form K10 at the Swedish Tax Agency (in Swedish)
4. The Swedish Companies Registration Office deregisters
The district court notifies the Swedish Companies Registration Office that the bankruptcy is closed. The Swedish Companies Registration Office deregisters the association.
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