Accountancy in Finland

>> Choice of Legal Form in Finland

Limited company

A limited company in Finland may be established by one or more natural or legal persons.

Limited companies are divided into private and public companies. The main difference betwee the two types is that the shares of a private limited company may not be traded in a stock exchange.
A private limited company must have a minimum share capital of 2,500 €.

The trade name of a private limited company must include one of these expressions: osakeyhtiö, oy, aktiebolag or ab.

A limited company must have a board of directors consisting of at least three members. If the company’s share capital is below 80,000 €, the number of board members may be less than three. At least one of the ordinary members of the board must be a resident in the European Economic Area unless authorities grant an exemption. The general meeting of the shareholders elects the board of directors.

A limited company may have a managing director, but a company with a share capital of at least 80,000 € must have one.

A limited company must have a representative who is permanently a resident of Finland.

The shareholders can exercise their power at the meeting of the shareholders.

A limited company usually must have one or more auditors. The auditors are elected at the shareholders meeting. Small companies, which meet certain limits, are exempt from performing a statutory audit.

General partnership

A General Partnership in Finland should have at least two partners, who are also its founders. The founders may be natural or legal persons, or another general partnership may act as a founder. At least one of the partners in the general partnership must be a resident in or, if the partner is a legal person, have its registered office in, the European Economic Area (EEA). In other cases, a permit must be applied from the authorities.

A general partnership can be founded without a cash input; a work input will be sufficient.

The partners of a general partnership are liable for the commitments of the partnership with their entire personal property. It is a joint liability, i.e. each partner shall be liable for all the debts of the partnership.

The trade name of a general partnership must include the words avoin yhtiö or öppet bolag unless the corporate form is otherwise indicated in the trade name.

General partnerships in Finland have no statutory management bodies. Each partner of a general partnership shall, based on his partnership, be entitled to represent the company.

A general partnership must have a representative, who is permanently a resident of Finland. If a general partnership has already a partner, a managing director or a holder of procuration who is a resident of Finland, it does not need a separate representative.

At least one auditor is usually required for a general partnership.

Limited partnership

There must be two or more partners in a limited partnership and at least one of them has to be a general partner.

At least one general partner shall be resident of the EEA. In other cases, a permit must be applied from the authorities. The general partner does not need to make a capital input to the partnership, a work input is sufficient. The silent partner must, however, make a capital input, although no minimum amount is set.

The trade name of a limited partnership must include one of the following expressions: kommandiittiyhtiö, ky, kommanditbolag or kb.

A limited partnership is constituted by the partnership agreement, which must be registered in the Finnish trade register.

A limited partnership has no statutory management bodies. Each partner is, based on his partnership, and without a separate authorization, entitled to represent the company, unless it is agreed otherwise.

A limited partnership should have a representative, who is permanently a resident of Finland. If a general partnership has a partner, a managing director or a holder of procuration who is already a permanent resident of Finland, a separate representative is not required.

Branch / Representative office

A branch refers to a part of a foreign organization that conducts business activities in Finland as a permanent place of business, without establishing a separate formal subsidiary. The trade name of a branch must include the trade name of the foreign entrepreneur as a supplement, which indicates that it is a branch, e.g. DFK International branch of Finland.

If a foreign organization from outside the EEA wishes to establish a branch in Finland, it must apply for permission from the authorities.

If an organization established under the laws of a country belonging to the EEA establishes a branch in Finland, it must submit a declaration to the Finnish authorities.

Public limited company

Unlike a private company, the shares of a public limited company may be traded in a stock exchange.

A public limited company must have a minimum share capital of 80,000 €.

The trade name of the public limited company must include one of the following expressions: julkinen osakeyhtiö, oyj, publikt aktiebolag or abp.

A public limited company must have a board of directors consisting of at least three members and a managing director. At least one of the ordinary members of the board has to be a resident in the European Economic Area unless authorities grant an exemption. The general shareholders’ meeting elects the board of directors.

A limited company must have a representative who is permanently a resident of Finland.

The shareholders can exercise their power at the meeting of the shareholders.

A public limited company must have one or more auditors. At least one auditor must be a KHT auditor or a KHT firm of auditors (an auditor authorized by the Central Chamber of Commerce). The auditors are elected by the shareholders’ meeting.


Latest version updated 10th October 2017

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