Limited Liability Company (Osakeyhtiö, Oy)

Separate and distinct legal entity. Managed by a board of directors, which is responsible for making major business decisions and overseeing general affairs of the company. Directors are elected by the shareholders of the Oy. The managing director (optional), who runs the day-to-day operations of the Oy, is appointed by the board of directors. Other officers are appointed by the board of directors or by the managing director.

Osakeyhtiö (Oy)

• Unlimited number of shareholders
• Generally no personal liability of the shareholders
• Taxed on its earnings at a corporate level (currently 20 percent), and shareholders are taxed on any distributed dividends
• Typical charter documents include:
  • Articles of association
  • Agreement of incorporation
  • Organizational board resolutions
  • Stock certificates (not mandatory to issue)
  • Shareholder register
• Incorporated by registration with the Finnish Trade Register (Kaupparekisteri)
• Board of directors has overall management responsibility; managing director has day-to-day responsibility
• Shareholders typically purchase stock in the company; separate classes of shares with different rights (eg, voting, dividends) are commonly used
• Annual report is filed annually with the Finnish Trade Register (Kaupparekisteri)

Osakeyhtiö (Oy)

• Private Limited Liability Company (Yksityinen osakeyhtiö, Oy): EUR0
• Public Limited Liability Company (Julkinen osakeyhtiö, Oyj): EUR80,000

Osakeyhtiö (Oy)

Shareholders of a company are generally not liable for the debts of a company aside from their financial contribution to the company.

Osakeyhtiö (Oy)

The profits of an Oy are taxed at 2 levels (commonly referred to as double taxation). First, the Oy pays a corporate tax on its corporate income; then shareholders pay tax on the distributed profits from the Oy. The Oy is subject to a Finnish corporate income tax rate, which currently amounts to 20 percent.

Osakeyhtiö (Oy)

Signing of agreement of incorporation (including articles of association), payment of (possible) share capital and registration of agreement of incorporation with the Trade Register.

Osakeyhtiö (Oy)

Well regarded and widely used. Most commonly used is the private limited liability company, and mainly only listed companies are public limited liability companies.

Osakeyhtiö (Oy)

Required to hold annual general meeting of shareholders to vote on certain items, such as adoption of financial statements and resolution on the discharge of the members of the board of directors and the managing director from liability.

Osakeyhtiö (Oy)

No statutory minimum number requirement. In practice, at least 1 meeting needs to be held yearly.

Osakeyhtiö (Oy)

Must annually file tax returns with the Finnish tax authorities.

Osakeyhtiö (Oy)

Initial registration, annual filings of annual accounts and filing of changes of registered information, such as changes in the board of directors, ultimate beneficial owners etc.

Osakeyhtiö (Oy)

No need to change as business expands. If securities issued by the company are listed at a regulated market, then the company must change its category from private to public.

Osakeyhtiö (Oy)

File dissolution documents with the Trade Register.

Osakeyhtiö (Oy)

Annual shareholders' meeting, which can be held per capsulam (ie, by a unanimous written resolution by all shareholders), shall be held within 6 months after the end of each financial year. Financial statements are required to be filed with the registration authority within 8 months after the end of each financial year.

Osakeyhtiö (Oy)

A legal person may not serve as a director. A director must be over 18 years of age. They must not be declared bankrupt, be prohibited from carrying on business, have restricted legal competency, or  be under guardianship.

Osakeyhtiö (Oy)

Not applicable for this jurisdiction.

Osakeyhtiö (Oy)

In the event an Oy has no authorized representative (ie, board member, managing director or special company signatory) who is resident in European Economic Area (EU, Norway, Iceland and Liechtenstein), the board of directors shall authorize a person who is resident in Finland to act as person authorized to receive service of process on behalf of the company.

Osakeyhtiö (Oy)

Not required.

Osakeyhtiö (Oy)

Not required.

Osakeyhtiö (Oy)

An address is needed, but there are no requirements as to the presence of directors or employees at that address.

Osakeyhtiö (Oy)

Allowed for incorporation.

Osakeyhtiö (Oy)

Allowed, but internal rules/insurance limitations may restrict law firm professionals from taking the role of a director. Even though a secretary is not required, law firms typically provide that kind of service.

Osakeyhtiö (Oy)

Shareholders: None.

Directors (unless granted  a permit by the Trade Register): At least 1 ordinary member (and 1 deputy director, if deputy directors are appointed) of the board shall be resident within the European Economic Area.

Managing director and possible deputy managing director (unless granted an exemption by the Trade Register): Required to be resident within the European Economic Area (unless granted a permit by the Trade Register).

Osakeyhtiö (Oy)

Nominee directors are not allowed.

Information about the shareholder must be entered into the register of shareholders kept by the company. If shares are issued through the book-entry system, it is not required that the registered account holder is the beneficial owner of the shares.

According to anti-money laundering legislation, companies which are not publicly listed are obligated to keep records of natural persons who directly or indirectly owns more than 25 percent of shares or holds more than 25 percent of the voting rights in the company or who exercises actual control over the company on other grounds (eg, partnership or shareholder agreement) (beneficial owners). If the company has no beneficial owners meeting these requirements or the company does not know them, the board, or the managing director or any other person in a corresponding position are considered as actual beneficial owners.

Companies that are not publicly listed are also obligated to register their beneficial owners (including their ownership and voting rights percentage to the nearest 2 decimal places) with the Trade Register. Registration information is available to those who under anti-money laundering legislation have the right to receive information on the company’s beneficial owners.

Osakeyhtiö (Oy)

Directors of the board are elected by the shareholders and are the highest authority in the management of the Oy; they govern the organization by establishing broad policies and objectives. A managing director may be appointed by the directors to manage the day-to-day operations of the Oy. The board of directors issues instructions regarding allocation of work between the board of directors and the managing director. The managing director is always authorized to represent the company and sign documents on its behalf in matters related to the day-to-day management of the company.

Osakeyhtiö (Oy)

The identity of directors and managing director is publicly disclosed (including date of birth, nationality and country of residence). The identity of shareholders of private, non-listed companies is not publicly registered. The Oy is, however, required to disclose the shareholder register (which contains identity and address of shareholders) to anyone upon request.

Osakeyhtiö (Oy)

There must be a minimum of one shareholder, and there is no limitation on the number of shareholders.

Minimum director requirements: 1 ordinary director and one deputy director. If 3 or more ordinary directors are appointed, no deputy directors are required.

If the articles of association do not provide otherwise, the maximum number of members of the board is 5.

Osakeyhtiö (Oy)

1 shareholder is sufficient.

Osakeyhtiö (Oy)

The shareholders' meeting resolves upon the removal of directors. The removal of the managing director requires a board resolution. The directors and the managing director may also resign by notifying the board.

Osakeyhtiö (Oy)

Where the board consists of 2 or more ordinary directors, a chairperson shall be appointed.
A managing director is optional.

The board of directors may also resolve to grant signatory rights to named individuals (if so provided in the articles of association). The board may grant a procuration right or a representation right. Such holders of signatory rights cannot make decisions that fall within the scope and competence of the statutory corporate bodies .

Osakeyhtiö (Oy)

No statutory minimum number requirement. In practice, at least 1 meeting must be held yearly. A meeting can be held by telephone or held per capsulam.

Osakeyhtiö (Oy)

For a shareholders' meeting, no specific quorum requirements apply, provided that all shareholders have been duly invited to the meeting. For board meetings, at least more than half of the board members must participate in a board meeting.

Osakeyhtiö (Oy)

Where share capital shall be paid in cash, opening a bank account with a bank is required. The bank must be properly regulated, but it does not have to be Finnish.

Osakeyhtiö (Oy)

An auditor must be appointed if the company fulfills more than 1 of the following conditions during the 2 most recent financial years:

• The average number of employees exceeded 3
• The company's reported balance sheet total exceeded EUR100,000
• The company's reported net turnover has exceeded EUR200,000

In addition, if the company’s main business is to own and manage securities and the company exercises significant influence over the operating and financial policies of another entity, an auditor must be appointed.

The appointed auditor shall be an authorized public accountant (HT or KHT) and must be resident within the EEA. Furthermore, a registered audit firm may serve as auditor. In case an audit firm is appointed, an auditor with principal responsibility must also be registered with the Finnish Trade Register. If only 1 auditor has been appointed and the auditor is not an audit firm, at least 1 deputy auditor must be elected.

Accounting documents must be kept in a manner ensuring that they can be easily made available for local authorities and the auditor of the company.

Osakeyhtiö (Oy)

Par value may be used but it is not mandatory.

Osakeyhtiö (Oy)

A limited liability company can issue new shares to existing shareholders or 3rd parties against consideration, whereby the number of shares is increased. The issuance of new shares in proportion to prior shareholdings may be decided by a simple majority of the shareholders' meeting. If the issuance of shares is not in proportion to prior shareholdings (directed share issue), such decision by the  shareholders' meeting requires a qualified majority. The shareholders' meeting may also authorize the board of directors to decide on the issuance of new shares. The issuance of new shares must be registered with the Trade Register. If the articles of association must be amended, a decision by the shareholders' meeting with a qualified majority is needed.

Osakeyhtiö (Oy)

The assets of the company may be distributed to the shareholders via:

• the distribution of profits (dividend) and the distribution of assets from reserves of unrestricted equity;
• the reduction of the share capital;
• the acquisition and redemption of own shares; and
• the dissolution and deregistration of the company.

The Finnish Limited Liability Companies Act includes detailed provisions on the above ways to distribute assets.

Further, the general rule under Finnish law is that shares may be freely transferred and acquired. Transferability may be restricted by provisions in the articles of association by a pre-emption clause and a consent clause. Transferability may be further restricted by provisions in a shareholders' agreement.

Osakeyhtiö (Oy)

The general rule under Finnish law is that shares may be freely transferred and acquired. Transferability may be restricted by provisions in the articles of association regarding only the pre-emption clause and consent clause. Transferability may be restricted by provisions in a shareholders' agreement.

Osakeyhtiö (Oy)

The company name must be indicated in the articles of association. The Trade Register assesses and decides whether the name can be registered. The name must differ from other trade names and trademarks in the company's line of business. The company name must include the word " Osakeyhtiö" or abbreviation "Oy," or the Swedish word "Aktiebolag" or abbreviation "Ab." Public companies are required to include the words "Julkinen osakeyhtiö" or the abbreviation "Oyj," or the Swedish word " Publikt aktiebolag" or abbreviation "Abp."

Osakeyhtiö (Oy)

In case the company intends to make transactions, investments, open a bank account or similar, certain KYC requirements apply pursuant to anti-money laundering legislation.

Osakeyhtiö (Oy)

Typically, a majority of 2/3 (qualified majority) of the votes cast as well as represented at the shareholders' meeting must formally approve any amendment of the articles of association. Some amendments, such as changes in the legal relationship between shares or restrictions on the right to transfer shares in the company, require approval by all of the shareholders affected.

Osakeyhtiö (Oy)

Typically none. Specific licenses may be required for certain types of business.

Osakeyhtiö (Oy)

Shelf companies can be purchased from service providers and the process depends on the service provider in question.

Typically, a share purchase agreement is entered into and necessary corporate resolutions (eg, appointing new board members) are passed and the registered company information id to be updated with the Finnish Trade Register.