An evaluation of the limited company loan prohibition - for legal certainty, efficiency and a competitive business environment

The loan prohibition rules in Chapter 21 of the Swedish Companies Act are difficult to interpret, subject to stringent sanctions – both tax and criminal – and associated with significant transaction costs. Moreover, they can be circumvented in several ways, raising fundamental questions as to their effectiveness and appropriateness. The project addresses a key research gap through a broad doctrinal and law-and-economics analysis, complemented by comparative and empirical studies. This combined approach enables a well-founded evaluation of the current rules, as well as the development of reform proposals aimed at strengthening legal certainty and creditor protection and contributing to a competitive business environment.