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[ESTABLISHING A BUSINESS ENTITY IN FINLAND]
and the first board members. If a person without a Finnish personal identity code is reported for registration for the first time, a proof of the person’s existence must be enclosed (such as a copy of the passport, or an extract from a business register in another country). The company will receive a business identity number at registration. PRIVATE TRADER Establishing the firm is simple since no separate founding documents are needed. A private trader must register the business in the Trade Register if the following circumstances exist; trader operates in permanent premises (such as a room separate from home); trader employs people other than spouse or child or grandchild who is a minor; or trader operates in a licensed field of trade. The private trader must also register for VAT if selling goods or services. Even though registration is not compulsory it might be a wise thing to do since it gives e.g., protection to the company name. PARTNERSHIPS Both types of partnership are founded by a partnership agreement. It is possible to agree in the partnership agreement on, for example, who has the right to represent the partnership, conveyance of the partnership share, resignation from the partnership, distribution of profit as well as termination or cancellation of the partnership agreement. The partnership agreement is supplemented by the provisions in the Partnership Act (389/1988). For the registration the partnership agreement and personal data forms as well as permits (if applicable) must be provided. After submitting the documents, the company will be registered by the Trade Register and the company receives a business identity number. In addition to the partnership agreement the partners may also draft a separate partner
agreement in writing in connection with the founding of the partnership. The partner agreement may contain specific clauses regarding the administration of the partnership, the decisions requiring unanimity of the partners, distribution of funds, non- competition and the handling of disputes. The agreement also aims to regulate the liabilities of the partners concerning the debts and commitments of the partnership. Such a restriction is not, however, binding on a third party. BRANCH OF A FOREIGN CORPORATION The branch office should be registered to the Trade Register prior to starting the business operations. Certain documents must be provided to the Trade Register, including specific forms, evidence of the establishment of the branch and of the appointment of a representative and indication of granting of the right to sign the company name. Also, an extract from the register in which the foreign entity has been entered in its home state or other evidence of its existence and a Finnish or Swedish-language copy or a legally valid translation of the memorandum of association, articles of association, rules or other corresponding documents of the entity must be provided. If the foreign entity is from outside the EEA a license must be provided and if a new person is entered in the Register and they have no Finnish personal identity code, there must be a proof of the existence of the person (passport or other such document). It should be noted that the documents needed for the establishment of the branch shall be provided in Finnish or Swedish which means that the documents must be translated. The establishing document of the branch office is usually the minutes of a board meeting regarding the establishment of the branch office. The retrieval of required documents and
ILN Corporate Group – Establishing a Business Entity Series
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