In Finland there a number of different types of company, the options are private entrepeneur, general partnership, limited partnership, limited liability company, cooperative or branch of a foreign enterprise.
A private entrepreneur
Retains any profits himself/herself, but is also responsible for the losses incurred by the business.
In a general partnership
Profits and losses are distributed among the partners as decreed by law or in the partnership agreement.
In a limited partnership
A silent partner is first paid a share of the profits on his investment as at the beginning of the accounting period, as decreed in the partnership agreement. The remaining part of the profit will be distributed among the general partners in accordance with the partnership agreement. Silent partners do not contribute to the coverage of losses.
A limited liability company
Pays its shareholders a dividend. Only the profit of the previous accounting period and unrestricted shareholder's equity may be used for dividends. If the results for the accounting period were negative or the company has made losses in previous accounting periods, these must first be subtracted from the above-mentioned items. The company's restricted equity may not be distributed as dividends. In a limited liability company profits are distributed as dividends paid to the shares of the shareholders.
In a limited liability company a shareholder's losses will only amount to the investment, unless he/she has pledged a personal guarantee for the company's debts.
Cooperative
Instead of obtaining a profit for its members, the purpose of a cooperative is to offer services for its members. Only a limited consideration on capital invested in the cooperative is paid from the profits. The profits, or the surplus, may be distributed to the members as extra wages, interest on cooperative capital or return of the surplus according to the use of the cooperatives services by the members, or as otherwise stipulated in the rules. Work cooperatives may pay extra wages to the members. Cooperatives are subject to a reserve requirement; part of the surplus must be transferred to the reserve fund, after the losses shown by the balance sheet have been subtracted.
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