The first stage in establishing a company is selecting the form of business. The primary forms of business in Finland are sole trader (TMI), general partnership (AY), limited partnership (KY), limited company (OY) and cooperative (OSK). Deciding which type of business to set up depends on the business area of activity and related risks.
The most common forms of business in Finland are sole trader and limited company. When selecting the type of business to set up, we recommend taking into account the liability of owners including any representatives. The responsible members of a sole trader, general partnership and limited partnership are liable with their personal wealth.
With responsibility comes the right to represent the company. Limited companies and cooperatives are represented by board members. How the company is represented will be agreed in the article of association.
Comparison of different forms of business
| Sole trader | General partnership | Limited partnership | Limited company | Cooperative | |
| Number of owners | 1 natural or legal person (or 1 person and spouse) | At least 2 natural or legal persons | At least 1 general partner and 1 limited partner, natural or legal persons | At least 1 natural or legal person | At least 1 natural or legal person |
| Liability of owners | Sole trader is liable with all assets. | Partners are liable with all assets. | General partner is liable with all assets. Limited partner is liable to the extent of the capital contribution. | Liability is limited to the capital contribution | Liability is limited to the capital contribution |
| Capital | No | No | According to the partnership agreement | At least 2500 EUR for private and at least 80 000 EUR for public company | No |
| Representative | Sole trader | According to the partnership agreement | General partners | Annual general meeting, CEO and management board. | Annual general meeting, CEO and management board. |
| Accounting | Annual report if certain conditions are filled | Annual report if certain conditions are filled | Annual report if certain conditions are filled | Annual report | Annual report |
| Distribution of profits | Normally only to the business owner | According to the partnership agreement | According to the partnership agreement | According to the holding or articles of association | According to the partnership agreement |
Other forms of business
There are a few other forms of business in Finland as well but they are usually meant for special purposes. These include registered associations (non-profit), foundations and building cooperatives.
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