There are several company forms in Finland. Common forms are as following: i) general partnerships, ii) limited partnerships and iii) limited liability companies.
However, there are three different types of limited liability companies :
i) private limited liability company;
ii) public limited liability company and
iii) European company.
Furthermore, it is noteworthy to point out that in Finland there does not exist trust institution equivalent to the common law system.
The limited liability company is the most common company form in Finland. Reason for this is that the limited liability company provides flexible regulation permitting effective company actions. This form of business has legal personality, liability of shareholders is restricted as well as its shares are transferable. All these above indicated features make the limited liability company preferred form for business activity in Finland when considering various available forms.
A limited liability company must be registered with the Finnish Trade Register. Registration must be made within three months of signing the memorandum of incorporation. A notification of start-up must be submitted to the Finnish Trade Register as well.
Notification documentation must include:
i) basic information of the established company;
ii) the memorandum of incorporation;
iii) the articles of association; and
iv) certain other documentation.
In case, the share capital is indicated it is to be paid in full before registration. In practice registration takes from two to ten weeks depending on current work load of the Finnish Trade Register. However, the company must be reported for registration within three months or the company’s formation expires. An express process can be request for a special reason.
Please notice that companies must submit their annual accounts to the Finnish Trade Register. Furthermore, additional stricter reporting requirements, such as preparation and publication of half-year reports, apply to publicly traded companies.
In addition, most companies must file a notification of their actual beneficial owners with the Finnish Trade Register. For example, limited liability companies and co-operatives must file a notification.
Further to this, companies must also submit their income tax returns to the Corporate Tax Office within four months of the closing of their accounting year.
Currently there are no minimum or maximum share capital requirements in Finland.
In Finland a foreign company may perform business activities through a branch office as well. The branch office is trading from a fixed place of business in the company’s name and on its behalf. Therefore, the trade name of the foreign company must be in the trade name of the branch office with a supplement in Finnish or Swedish to indicate its status as a branch. The governing body of the foreign company shall make the decision to establish a branch office in Finland.
The Trade Register Act enacts detailed provisions on the compulsory registration of a branch office. Furthermore, it is important to notice that there are requirements such as filing of the annual accounts of the foreign company with the Finnish Trade Register which one must be follow.
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*This article is for general information purposes only and does not constitute a legal advice.