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I am getting error class not register while installing my sap business one add-on. When I installed SAPBusinessOneSDK tools then it is working. So Is it mandatory to install SAP Business one SDK if add-on developed using SAP business one visual studio framework.

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Yes, when you use SAPBusinessOneSDK you must install it on every client machine, it's not enough pass it in the intaller, nether required because SAP calls the registered dll. You should implemented as policy install the sdk when clients are installed.

Wilch
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