Limited liability company is a company form where the entrepreneur’s finances and the company’s finances are separate. This being the case, it is a good way to transfer financial liability from the entrepreneur to the company, because the entrepreneur is only liable for the capital invested in the company’s shares, not their personal assets.
In a limited liability company, the entrepreneur pays themself a salary, which is taxed as earned income.
Good company form for growth companies
From the aspect of tax, a limited liability company is a sensible option for companies targeting growth. If the company requires a lot of financing and needs capital, a limited liability company is a good choice.
A limited liability company is particularly suitable if the company operates in a high-risk market.
A limited liability company brings credibility
In terms of overseas trade, a limited liability company is a good choice because, as a company form, it is well-respected and appreciated.
It is also a sensible option when the company has more than one founder or employees.
Paperwork is part of the entrepreneur’s daily life
Keep in mind that, compared to being a private trader, for example, a limited liability company involves a lot more red tape: it requires a board of directors and double-entry bookkeeping.
Neither is it as simple to wind down a limited liability company. It can be dismantled if the company is divided or merged with another company. Other methods of dismantling a company include liquidation and bankruptcy.
This is how you found a limited liability company
A limited liability company is established once it has been registered in the Trade Register of PRH, the Finnish Patent and Registration Office. In order to be registered, the company must file a start-up notification.
You can use the same start-up notification to register your company in the Finnish Tax Administration’s VAT register, the Employer Register as well as the Prepayment Register.
Filing a start-up notification online
You can file your start-up notification online as long as you meet the following requirements:
- The share capital is EUR 0.
- The issue price of the shares is EUR 0.
- Standard Articles of Association suffice for the company.
If the above conditions are not met, you must establish the company using printed forms. You must submit the following information in connection with the start-up:
- The limited liability company’s company name, financial period, domicile as well as any potential auxiliary company names and their lines of business.
- The names and personal identification numbers of shareholders, the potential CEO as well as board members.
- The names and personal identification numbers of auditors, procuration holders or persons authorised to represent the company.
Once the electronic signatures have been provided and the handling fee (EUR 275) for the notification has been paid to PHR’s Trade Register, you will receive a Business ID for your limited liability company as well as the entry number of the notification.
The service generates a Memorandum of Association and Articles of Association for the limited liability company.
File a start-up notification online
Start-up notification using printed forms
You can also found a limited liability company using a ready-made start-up package. You can download the package from YTJ.fi. The package includes all of the document templates, notification templates and instructions required for founding a limited liability company. The processing fee of a start-up notification in paper format is EUR 380.
Read more about filing a start-up notification using a paper form
Founding a limited liability company on your own
You can also found a limited liability company on your own. However, it is a legal obligation to have at least one deputy member. One deputy member is required always when the Board of Directors comprises fewer than three members.
We will support you in founding your company
You can open a corporate account with us for the payment of your share capital. Get in touch and make an appointment. Remember to bring with you:
- Your company’s Memorandum of Association
- The minutes of the board meeting showing the different shareholders’ right to use the company’s account
- A power of attorney for managing your company’s bank transactions
You can arrange all of your company’s necessary banking and insurance services in the same meeting. Our expert will also assess the need for Finnvera’s start-up guarantee or any other loans or grants.
When does it pay off to change to a limited liability company?