Starting a limited liability company is easy – here is a reminder of the responsibilities related to establishing a company

A limited liability company can be established quickly, but it involves obligations. The Finnish Patent and Registration Office (PRH), which maintains the Finnish Trade Register, reminds companies that they must keep their details up to date and file their financial statements for each financial period. In the start-up phase, it is also good to know how a limited liability company can be closed down.

The Finnish Trade Register lists approximately 310,000 limited liability companies. Registered details about these companies are widely used by enterprises, the financing sector, and authorities. Therefore, the importance of keeping the details updated does not just concern the company.

Board members are also responsible persons

In a limited liability company, the member of the board of directors, deputy members, chairperson, and the managing director (CEO), if any, and their substitute are the persons responsible for the company. The responsibility does not depend on whether a person participates in the company’s daily operations.

“A deputy member of the board of directors can also be responsible for preparing financial statements and filing notifications with the Finnish Trade Register if an ordinary member is prevented from performing their duties,” says Legal Officer Jussi Huolman.

Persons responsible for the company can receive post from the PRH if there are deficiencies in the Trade Register details or a fee has been imposed on the company for delayed or missing financial statements.

If there is only one ordinary member on the limited liability company’s board of directors, the board must have at least one deputy member. If there are several ordinary members, the board of directors must have a chairperson.

Trade Register details must be kept updated

Several details about limited liability companies are registered in the Finnish Trade Register. Changes to these details must be filed with the register.

It is important to keep addresses and other contact details updated so that post reaches the correct address. Changes in details concerning responsible persons must be filed without delay because several parties use the Finnish Trade Register to check who can act on behalf of the company.

Details on beneficial owners with an ownership interest or control in the company must also be kept updated. If the company’s ownership base changes, the beneficial owners can also change. Information about beneficial owners is used by parties such as banks and accounting firms.

“Financial statements must be filed with the Finnish Trade Register for each financial period, even if the company is inactive,” says Huolman.

Limited liability companies cannot be informally terminated

Limited liability companies cannot be terminated by submitting a free-form application. The most common way to close down a limited liability company is by going into liquidation. The liquidation procedure is subject to a fee and includes several phases, taking at least five months.

As long as the company is registered in the Finnish Trade Register, it must file its financial statements by the deadline and keep its details updated. Neglected obligations can result in fees.

The PRH removes companies from the Finnish Trade Register in cases provided by law. However, deregistration is not an alternative way of closing down a limited liability company or avoiding the company’s obligations.

“Before the company is deregistered, a fee for late submission of financial statements or a fee for negligence of notifications to the Finnish Trade Register can be imposed. This means that deregistration is not free of charge for the limited liability company.”

The Finnish Parliament is currently preparing a legislative proposal that would lighten the burden for closing down a limited liability company.

Further information:

Legal Officer
Jussi Huolman
Finnish Patent and Registration Office (PRH)
Tel. +358 29 509 5898