Steward ownership and svb-Aktiebolag

A comparison

The svb-Aktiebolag, which stands for "Aktiebolag med vinstutdelningsbegränsning" in Swedish, is a specific legal form introduced in Sweden in 2006. It translates to "Limited Liability Company with Profit Distribution Restriction" in English. The svb-Aktiebolag is designed for companies that dedicate their activities to purposes other than pure profit-making for their shareholders. It ensures that profits generated by the company remain within the organization and are not distributed to shareholders as dividends.

Key features of the svb-Aktiebolag include:

1. Asset Lock: The svb-Aktiebolag has an irreversible asset lock mechanism, meaning that profits cannot be distributed to shareholders, and the company's assets must be retained within the organization.

2. Ownership Structure: The ownership structure of the svb-Aktiebolag involves shareholders who act as capital contributors. The company's capital contributors are treated as guarantors rather than traditional shareholders with equity stakes.

3. Purpose: The svb-Aktiebolag is suitable for companies that operate with a purpose other than primarily shareholder value and/or profit maximization. It is commonly used by organizations in the social sector or those that were previously publicly funded and focus on serving the common good or community interests.

4. Conversion and Liquidation: The svb-Aktiebolag can only convert into other legal forms with comparable asset binding or into non-profit forms. In the case of liquidation, after settling debts, any remaining assets are transferred to other entities with similar asset binding.

5. Regulation and Supervision: To ensure compliance with the asset lock and purpose, the svb-Aktiebolag is subject to regulation and supervision. There are mechanisms in place to oversee the company's adherence to its defined purposes and to prevent any attempts to bypass the asset lock.

6. Limited Financing Options: While the svb-Aktiebolag allows equity financing, dividend distributions are restricted. Dividends can only be paid in the form of capped interest rates on the contributed capital.

Despite being a legal form with comprehensive asset binding, the svb-Aktiebolag has seen relatively limited usage in Sweden compared to other legal structures. This might be due to Sweden's liberal foundation laws, which provide a simpler way to achieve similar asset binding for entrepreneurial initiatives, making it less common for companies to adopt the svb-Aktiebolag legal form. Another reason could be the very restrictive options for financing. As of the text's writing, there were approximately 195 companies operating as svb-Aktiebolag in Sweden.

Can a svb-Aktiebolag be classified as a steward-owned company? Yes, regarding the asset lock principle a svb-Aktiebolag is steward-owned by nature. The company however has to also install mechanisms keeping the majority of the voting shares within the company.