Forms of Business Organisation

A company may choose one of five forms of business organisation in Finland:

• limited company;
• limited partnership;
• general partnership;
• co-operative;
• branch.

A limited company may be established by one or more persons or organisations resident in countries of the European Economic Area (EEA). An EEA resident may also act as a private entrepreneur. The new Finnish Companies Act entered into force on September 1st 2006.

The requirements are as follows:

Capital

Minimum share capital of €2,500 (100% paid up) is required for a new private limited company and €80,000 for a public limited company. The minimum number of shares is one share. Capital may be supplied in non-cash forms, which must be “reasonable” and valued by auditors approved by the Finnish Central Chamber of Commerce or the Chamber of Commerce.

Founders & Shareholders

Under the previous law, no permit is required if at least one of the founders is a resident of the EEA. (Thus, a Finnish limited company whose shareholders are all non-EEA residents may act as founders of another company.) Otherwise, a permit is required for each non-resident founder. A copy of the company’s certificate of incorporation and draft articles of incorporation must be delivered to the Trade Registry at the National Board of Patents and Registration (NBPR) within three months of the date on the company’s memorandum of association signed by at least one member of the board; its formation is deemed otherwise to have lapsed. There are no general shareholding restrictions based on residence, domicile or nationality.

Board of Directors

The board must have one to five members unless the company’s articles of association specify otherwise. Articles of association may stipulate either a fixed number of members or a minimum and maximum number. The board must have a deputy member if it has fewer than three members. The Companies Act does not have any specific provisions on the size of a company that must have a managing director or that can have a supervisory board. The managing director or a member of the board may not act as a member of the supervisory board. At least one-half of the members of the board, one supervisory board member and the managing director must be residents of EEA countries. The NBPR can grant an exemption from these requirements.

Management

A limited company may have a managing director appointed by the board of directors. The managing director is in charge of the current affairs of the company under instructions issued by the board of directors. The managing director may also be a member of the board of directors. The Companies Act eliminated the requirement that companies of a certain size must have a managing director. The managing director must be a resident of an EEA country, although exemptions may be granted.