Forms of Business and Companies in Finland

Entrepreneurship can be pursued alongside regular employment, studies or other activities, meaning that the business is operated part-time. This approach allows an entrepreneur to gradually test a business idea, gain initial experience and assess demand for a product or service without giving up their main occupation.

Light entrepreneurship allows individuals to sell their services without establishing their own company in the traditional sense. Depending on the model used, the service provider handles invoicing, while the entrepreneur receives payment after the applicable charges and service fee have been deducted.

Light entrepreneurship can be suitable for testing a business idea or completing individual assignments. However, before starting, it is important to understand how the chosen service handles invoicing, taxation and other obligations.

An entrepreneur can establish their own business and take responsibility for its operations, customers, income, expenses and development. Depending on the chosen business form, this may involve operating as a private trader, a limited liability company (Osakeyhtiö) or another legal form.

A business can be established together with another entrepreneur or several partners. In this case, it is important to agree in advance on the division of responsibilities, decision-making, financing, profit distribution and liability. Some partnership forms require at least two partners. For example, a general partnership and a limited partnership cannot be established by one person alone.

Under a franchise model, an entrepreneur uses an established business concept, brand, products or services and operating system provided by the franchisor. This can provide access to an already developed business model and a recognised brand, but the entrepreneur must comply with the terms of the franchise agreement and normally pay fees associated with using the system.

In team entrepreneurship, several entrepreneurs combine their knowledge, skills and resources to create a joint business. Participants often have different professional backgrounds and may also run their own businesses alongside their involvement in the joint venture.

This approach makes it possible to combine different areas of expertise, share responsibilities and risks, and make use of the resources available within the team. A joint business can, for example, be organised as a limited liability company (Osakeyhtiö, Oy) or a cooperative (Osuuskunta).

A startup is typically established to develop a new product or service and scale the business rapidly. Unlike a conventional small business, a startup is often focused on fast growth and may require external financing.

A freelancer provides services independently to clients, usually working on individual projects or assignments. Freelancing is not itself a separate legal form of business. Different models can be used to operate as a freelancer, including providing services through one's own company.

Instead of starting a business from scratch, an entrepreneur can acquire an existing company or an established business. This option may provide access to an existing customer base, equipment, employees, contracts and business processes. However, before making a purchase, it is important to carefully assess the financial position of the business, its liabilities, contracts and associated risks. For more information about buying a ready-made or shelf company in Finland, see “Ready-Made or Shelf Company in Finland”.

A private trader (yksityinen elinkeinonharjoittaja) is one of the simplest forms of running a small business, particularly when the business is mainly based on the entrepreneur's own work.

The entrepreneur is personally liable for the business's obligations with all of their personal assets. This means that this form requires particularly careful consideration of financial risks.

A private trader can register in the Trade Register (Kaupparekisteri), although registration requirements depend on the circumstances. The abbreviations “Tmi” and “Toiminimi” are commonly used when referring to a private trader.

Osakeyhtiö is one of the most common company forms in Finland and is suitable for a wide range of business activities. Finland has private limited liability companies (yksityinen osakeyhtiö, Oy) and public limited liability companies (julkinen osakeyhtiö, Oyj). Most small and medium-sized businesses use the private Oy form.

The company is a separate legal entity, so shareholders are generally not personally liable for the company's obligations. However, personal liability can arise in certain situations, for example when an individual provides a personal guarantee for a company loan.

An Oy can also be established by a single person. If the board has one or two ordinary members, it must have at least one deputy member of the board (varajäsen).

A general partnership must have at least two partners. This form may be suitable for a relatively small business where the partners know and fully trust each other. The partners are personally liable for the obligations of the business with their personal assets.

A limited partnership also requires at least two partners. One or more partners are general partners (vastuunalainen yhtiömies), while at least one partner is a silent partner (äänetön yhtiömies).

A general partner is personally and fully liable for the partnership's obligations. A silent partner's liability is generally limited to the amount of their agreed contribution. This form can be used, for example, when an entrepreneur wants to bring in an investor who does not directly participate in managing the business.

A cooperative can be suitable for joint entrepreneurship when several individuals or companies combine their resources, knowledge or professional skills. A cooperative can formally be established by a single person, although in practice this form is typically used for team-based business activities.

The purpose of a cooperative is to support the economic and other activities of its members. Members can use services provided by the cooperative and jointly organise business activities.