Public Business Support and Funding

TABLE OF CONTENTS PREVIOUS CHAPTER STARTING UP A BUSINESS IN FINLAND NEXT CHAPTER SUBSIDIARY A subsidiary is a separate entity controlled by its board of directors. Liability is limited to the share capital of the subsidiary. Shareholders in general are not liable for acts of the subsidiary company but directors may personally be liable. A subsidiary is regarded as a more substantial presence and is helpful, for example, in opening a bank account in Finland, obtaining a lease or other contracts, attracting personnel and entering into commercial agree- ments. The procedure of registering a subsidiary in Finland is very simple and usually takes no longer than one week. First the subsidiary must check the availability of its name. Next, the articles of association, the list of shareholders, the nature of the contribution and a statement regarding the value of the contribution in kind, and details regarding their contribution must be deposited along with the deci- sion to open. Limited company All types of business can be set up as a limited company and one or more people or organizations can establish a limited company. When setting up a company, the founders register all the company's shares. There is no specified share capital re- quired for private limited companies. Public limited com- panies must establish a share capital of at least €80 000. The Finnish Companies Act does not specify anything about the residence or domicile of the shareholders, i.e., the founding shareholders of a limited company may also be from outside the EEA area. The shareholders are liable for the company's commit- ments only to the extent of the capital that they have in- vested in the company unless they have guaranteed loans on its behalf. The shareholders have the power to make decisions on issues relating to a limited company. Shares equal votes, so the number of shares corresponds to the number of votes a shareholder has. A limited company is required to have a board of directors appointed by the shareholders. The board is responsible for managing and representing the company. The board may elect a managing director to handle the day-to-day management of the company. However, the appointment of a managing director is optional. If a limited company has appointed a managing director, the appointment shall be indicated in the Memorandum of Association. If the board of a limited company is comprised of less than three members, at least one deputy member must be appointed. NOTE that at least one of the board members and one of the deputy members (reviewed separately) must have permanent residence in the EEA area. If they do not, a license must be sought from the Finnish Patent and Registration Office (PRH) for all ordinary members or deputy members who are from outside the EEA area. 13

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