The most common type of legal entity in Finland used by businesses is the limited liability company (“Osakeyhtiö” in Finnish, abbreviation “Oy”). The act that governs all limited liability companies registered in accordance with Finnish law is called Limited Liability Companies Act (“Osakeyhtiölaki” in Finnish).
Establishment
A limited liability company shall be incorporated by way of a written Memorandum of Association, signed by all shareholders. The Memorandum of Association shall always contain the following information:
- the date of the contract;
- all shareholders and the quantity of shares subscribed for by each of them;
- the price to be paid to the company for each share (subscription price);
- the time when the shares are to be paid; and
- the Members of the Board of Directors of the company
The Articles of Association shall be included or attached to the Memorandum of Association. The Articles of Association shall always contain the following information on the company:
- its trade name;
- the municipality in Finland where it has its registered office; and
- its field of operation
This is the only mandatory information that has to be in these documents.
Registration
Limited liability companies come into being through registration. A limited liability company shall be notified for registration to the Finnish Patent and Registration Office (PRH) within three months of the signing of the Memorandum of Association; failing this, the incorporation of the company shall lapse.
Share capital must be paid before registration. A subscription price paid in cash shall be paid into an account of a company in a Finnish deposit bank or in a branch of a foreign credit institution licensed to accept deposits in Finland, or into a comparable foreign account. Instead of cash, the subscription price can be paid in full or in part with other assets (contribution in kind) but if so, provisions on the payment of the subscription price in kind shall be included in the Memorandum of Association.
The minimum share capital of a private company shall be EUR 2.500 and that of a public company EUR 80.000. Once the payment of share capital is accomplished, the company may be registered. The registration shall be done by filling in a form provided in the web site of The Finnish Patent and Registration Office. The form shall be provided with:
- a declaration by the Members of the Board of Directors and the Managing Director to the effect that the provisions of the Limited Liability Companies Act have been complied with in the incorporation of the company; and
- a certificate by the auditors of the company to the effect that the provisions of Limited Liability Companies Act have been complied with
The form shall be enclosured with:
- a receipt for paying the handling fee of EUR 380;
- the original Memorandum of Association; and
- a copy of the Articles of Association
In Finland the establishing a business is easy. The obligatory documents and information are only a few and the registration takes normally less than two weeks. Nevertheless it’s advisable to use a lawyer to make all the documents deeded and include more information to those that is obligatory. It is always recommendable to make for example a shareholders agreement even the law doesn’t require it.
Publisher: Tempo Attorneys at Law Ltd, Finland