Company liquidation in Finland is completed under the Commercial Law, primarily. However, there are also cases where the insolvency and bankruptcy regulations apply. Below, our lawyers in Finland explain how you can close a business in this country. Considering there are two procedures available, you can rely on our law firm for assistance during both proceedings.
| Quick Facts | |
|---|---|
| Company liquidation in Finland is also known as | Company winding up |
|
Legislation |
Limited Liability Companies Act in Finland |
|
Types of company liquidation in Finland |
Voluntary or compulsory |
| Voluntary process implies |
– the dissolution decision is adopted by company shareholders, – the liquidator sends a notification of closing the company to the Finnish Trade Register, – the same liquidator analyzes and sells the asses for paying and closing debts. |
| Compulsory process |
Occurs in the case the company owners no longer afford to pay debts and/or face financial difficulties. The process is the same as the voluntary closing, except the fact that a judge can appoint the liquidator. |
| General meeting of shareholders |
To decide the company liquidation in Finland and commence the process |
| Responsibilities of the liquidator |
– verifies company assets and sells them, – ensures all debts are paid, – drafts varied company liquidation documents, among others |
| The company liquidation decision is registered by |
The liquidator |
| Official proceedings in the private entrepreneurship sector |
No official proceedings are solicited to wind up the operations of a private entrepreneur in Finland. |
| Dissolving a general/limited partnership in Finland | Can be dissolved by unanimous settlement or may be put into liquidation. |
| Submitting the tax return to the Finnish Tax Administration for the last financial year (YES/NO) |
YES |
| Termination notification required (YES/NO) |
YES |
| Terminating the business name |
Once the company is closed |
| Time frame to liquidate a company in Finland (approx.) |
Around 7 months |
| Working with our Finnish local agents |
We assist local and foreign businessmen in winding up companies in Finland by managing the whole process. Complete services at affordable prices can be offered. |
Table of Contents
Reasons to close a company in Finland
The Finnish Company Act provides for specific grounds under which a company can undergo liquidation. Also known as company winding up, it is possible if:
- the company was created for a specific project which has come to fruition;
- the company was created for a limited duration of time from the beginning;
- the shareholders decide to terminate the business due to disputes or other reasons;
- the company is insolvent or bankrupt, which leads creditors to file for debt collection with a Finnish court of law;
- the company no longer meets the Company Law’s requirements or its Articles of Association’s stipulations.
Our law firm in Finland can assist in closing a company no matter the reason.
Procedures to wind up a company in Finland
There are two ways to close a company in Finland:
- the voluntary one;
- the compulsory/mandatory/judicial one.
Both proceedings apply to all types of businesses in Finland. However, the most employed legal entity is the private limited liability company or LLC.
If you need assistance in LLC company liquidation in Finland, you can rely on our lawyers.
Company liquidation steps in Finland
There are several steps to complete the company winding up procedure in Finland. They depend on the type of proceedings the business is undergoing.
In the case of voluntary liquidation:
- the shareholders must convene a meeting where they adopt the dissolution decision;
- during the same meeting, they will appoint the liquidator;
- then, the liquidator must file de liquidation decision with the Companies Register;
- the liquidator will handle the payment of the creditors and reconciliation of all accounts.
In the case of compulsory company liquidation:
- the decision to close the company will be ruled by a judge;
- the judge will also appoint the liquidator in the person of a court officer;
- the rest of the procedure will be handled the same way as in the voluntary one.
Our Finnish agents can advise on both types of procedures if you need support. You can also check this video presentation with details on this topic:
The company liquidation process
A Finish company can be liquidated if the members take this decision during a general meeting. The main legislative act which regulates all the activities related to the liquidation is the Finish Companies Act.
During the process of liquidation the assets of the company are converted into cash, all the debts are paid and the remaining assets are distributed among the shareholders according to the Articles of Association.
The liquidation process of a Finnish company starts with a general meeting where the decision is approved and a liquidator is appointed in order to carry on with the company’s activities related to the liquidation. The liquidator can be appointed by the Finish registration authority in case the members haven’t already appointed one.
In the beginning, the balance sheet of the company must be drawn up by the liquidators with the help of the former management board and audited by its auditors (if there are any).The balance sheet must be presented in front of the general meeting of the shareholders along with the liquidator’s observations regarding the way the claims should be submitted and covered.
The liquidator can act in the name of the company only if its actions are helping the process of liquidation.
The creditors of the company are announced regarding the liquidation and invited to deposit their claims. Only after covering all the claims the remaining assets are distributed among the shareholders. When a debt is disputed the funds necessary to cover it are put aside until the situation is clarified.
The liquidator must submit financial statements and annual reports to the Ordinary General Meeting for each financial period.
The last balance sheet must be accompanied by the report indicating the distribution of the company’s assets, annual reports and auditor’s reports at the last General Meeting of the Shareholders. These reports must be verified by the company’s auditors but no later than a month from their elaboration.
After presenting the final reports to the general meeting, the liquidators require the deletion from the registers.
Within three months from the distribution of assets the claims regarding the distribution of assets can be raised. After a period of five years a share not claimed by anybody is declared lost.
How long does it take to liquidate a company in Finland?
The process of liquidation of a Finish company is conditioned by many factors such the existence of debts that has to be covered, by the claims brought to the process of distribution of assets and other. The usual process doesn’t take longer than a half of year but it can be extended to several years. Following liquidation, the company must also be deleted from the Trade Register’s records, matter that can be explained in detail by our lawyers in Finland.
Company winding up statistics in Finland
According to recent news:
- in 2023, 2,700 companies went bankrupt, 27% more than in the previous year;
- these companies generated a combined turnover of 2 billion euros;
- also, the number of bankruptcies impacted around 8,000 employees.
We can also assist in immigration to Finland. If you have a job, a place to study, or a family member who lives in Finland, you can apply for a residence visa there. Before traveling to Finland, submit an application for a Finnish residency permit. As for citizenship in Finland, it can be obtained through application.
If you need assistance in company winding up procedures in Finland, please contact us. Our lawyers will guide through the entire process.