Purpose
A Finnish limited liability company may be dissolved through a voluntary liquidation process in accordance with the Finnish Limited Liability Companies Act. The purpose of the liquidation is to ascertain the financial position of the company, convert the necessary amount of assets into cash, repay the company’s debts and return the surplus to the shareholders. In case the company in liquidation has more liabilities than assets, the company cannot continue the voluntary liquidation process. A company is considered to have been dissolved when the liquidator has presented the final settlement to the general meeting.
Time Frame
A liquidation process typically takes around 5-6 months from the drafting of the first documents related to the liquidation to the actual dissolution of the company. However, the exact time frame of the liquidation is dictated by the public summons period, in addition to which, the process is also affected by the number of creditors involved in the process as well as the complexity of the contractual obligations of the company.
Process
Liquidation begins with a shareholders’ resolution to enter the company into liquidation. One or several liquidator(s) who manage the company’s affairs during the liquidation should be elected in the said resolution. Once the liquidation is registered with the Finnish Trade Register, the liquidator(s) shall apply for a public summons to the creditors of the company and a due date for creditors to present their claims is set. The public summons period is at least 3 months from the registration date (published in the Official Journal). The liquidator(s) must also notify the known creditors about the liquidation during the public summons period. The liquidator(s) must distribute the remaining assets and cash to the shareholders once all the liabilities have been settled with the creditors. Final settlement (including financial statements) must be prepared and presented to the shareholders. And finally, the liquidator(s) shall notify the Trade Register about the dissolution of the company. During the liquidation or following the completion of the liquidation, the liquidator should also submit a tax return to the Finnish Tax Administration as well as take case of VAT filings (as necessary).
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