Practical incorporation measures for a cooperative.
1. Choice of the Trade Name for the Cooperative
In due time before preparing the instruments of incorporation, you must find a trade name for the cooperative. The trade name is required to identify the cooperative uniquely and be clearly distinguishable from other trade names already in the Trade Register. It may be useful to browse through some registered trade names. This is possible on info service websites like YTJ and Virre .
According to the Trade Names Act, the trade name of a cooperative has to include the word ”osuuskunta”, the element ”osuus” in a compound word or the abbreviation ”osk” referring to the legal form. If the trade name is in Swedish language, the corresponding elements are the word ”andelslag”, the element ”andels” or the abbreviation ”anl”.
The trade name is registered either in Finnish or Swedish language. It can have other parallel trade names in other languages, i.e., translations of the Finnish or Swedish trade name. Any parallel trade name must be included in the statutes of the cooperative.
Auxiliary trade name
The cooperative can exercise part of its activity under an auxiliary trade name. A board resolution can implement an auxiliary trade name. Upon registration of the auxiliary trade name, you will have to precise the part(s) of the line of activities of the cooperative exercised under the auxiliary trade name, which is not allowed to contain the reference to the legal form. Every auxiliary trade name to be registered requires the payment of a separate handling fee.
More information: https://www.prh.fi/fi/kaupparekisteri/yritystennimet/aputoiminimi.html
Parallel trade name
Suppose you wish to file an auxiliary or a parallel trade name for the cooperative. In that case, it must be mentioned on the notification form(s) of the Trade Register, even when there is a separate board resolution concerning the extra name attached to the application.
More information: https://www.prh.fi/fi/kaupparekisteri/yritystennimet/rinnakkaistoiminimi.html
There is no guarantee that a given trade name will be successfully registered. You can submit with your notification of incorporation some alternative names to be examined to save time. Their maximum number is three. These names will only be reviewed if the original trade name is unacceptable for registration. There is no use in produce forms, letterheads, or signboards before the trade name is officially registered.
2. Incorporation of a Cooperative
Any cooperative is founded with a written incorporation instrument. Its signatories are called incorporators, who will also become its members. There can be one or more incorporators. Incorporators of cooperatives can be foreigners living or residing outside the European Economic Area.
The cooperative is always obliged to file a notification of incorporation at the Trade Register. The cooperative exists only after its registration.
Start-up advice is available from Pellervo Coop Center plus, among others, from Finnish Enterprise Agencies, ProAgria agencies, and numerous regional enterprise service organizations around the country. Some of them employ business advisers specialized in starting cooperatives. Tampere Region Cooperative Center offers advice, training, and consulting against payment. The Trade Register provides advice in Finnish on number 029 509 5900. You are always welcome to contact other cooperatives in your region to hear experiences and ask for advice.
3. Incorporation instrument
The incorporation instrument (COA Chapter 2 – Section 1) must have the minimum contents required by the law.
Minimum contents of the incorporation instrument (COA Chapter 2 – Section 2)
The incorporation instrument shall contain the following information:
1) the date of the incorporation instrument;
2) all the incorporators and their shares;
3) the amount paid to the cooperative for a share (the issue price);
4) the period for payment; and
5) the members of the board of directors of the cooperative.
The rules referred to in Section 3 must be included in or attached to the incorporation instrument either in Finnish or in Swedish. When drawing up these, please use the rules models on this website. The cooperative’s financial year has to be determined either in the incorporation instrument or in the rules. The incorporation instrument must include the managing director (the board of directors), the financial auditors, and the performance auditors if such a body exists in the cooperative. If shares are issued, the information mentioned in Paragraph 1 must be included for the shares and their subscribers. It is possible to designate the chairperson of the board (and of the supervisory board). If the board chairperson is not named in the incorporation instrument, the board of directors must hold a constitutive meeting to elect its chairperson. The record of this meeting is to be attached to the documents filed with the notification to the Trade Register.
The incorporation instrument must be issued in several original copies because one copy is to be attached to the cooperative’s incorporation notification. It is useful to keep one copy for the cooperative itself.
4. Incorporation notification at the Trade Register
The cooperative must be notified for registration at the Trade Register within three months after the signature of its incorporation instrument. The notification is submitted on the Form for notification of incorporation Y1. Additionally, you must fill up Appendix Form 2 and the Personal Data Form.
The full members of the cooperative board are liable for the notification of incorporation. The notification of incorporation must be signed by a member responsible for its filing or by his or her delegate. If a delegate signs the notification, it must be accompanied by the original authorization.
The documents for notification of incorporation (the Form for notification of incorporation Y1, Appendix Form 2, and the Personal Data Form) are submitted in the form of originals. They are accompanied by:
- the instrument of incorporation in original
- the rules of the cooperative
- the record relating to the election of the chairperson of the board (if the chairperson is not designated in the instrument of incorporation)
- the evidence for the payment of the handling fee (a receipt of account statement).
NOTE! The home address of a person resident in Finland is no longer notified. The Personal Data Form is used to file the identity information of natural persons.
The instrument of incorporation must be accompanied by a declaration signed by the members of the board of directors and by the managing director to acknowledge that the Finnish Cooperatives Act has been respected during the incorporation. This declaration is submitted in Appendix Form 2 or a separate note.
When filing the notification of incorporation at the Trade Register, you pay the handling fee applicable according to the Finnish Patent and Registration Office’s price list. A separate handling fee is payable for each auxiliary trade name. The receipt of the payment is attached to the notification. Details and price lists for the handling fee are available on the site of the Finnish Patent and Registration Office.
The instrument of incorporation with its annexes can be sent to the Finnish Patent and Register Office by post, or you can submit it at its customer service or at any customer service of the Digital and Population Data Services Agency, of any ELY center (Center for Economic Development, Transport, and the Environment) or the Tax Administration. Start-up notification forms of the YTJ site.
The site also features a start-up package containing the model forms needed to incorporate and notify a cooperative with the respective instructions. The model rules for a cooperative are intended for a corporation in need of typical standard rules, though we recommend using the model rules of this guide when drawing up your own.
You must print at least one copy of the notification form and its annexes you filled to be used by the cooperative.
5. Start-up notification to the Tax Administration
A cooperative is required to keep records and pay taxes for its activities. Taking up its business must be notified to the Finnish Tax Administration.
The cooperative’s incorporation on notified on Form Y1. The same form is used to file the cooperative at the Trade Register of the Finnish Patent and Register Office and the different registers of the Finnish Tax Administration, namely Tax Prepayment Register, Employer Register and VAT filing register for the VAT liable. At the same time, you are required to submit the information necessary to calculate the prepayments according to the estimated turnover and the taxable income of the cooperative.
For paying salaries, the cooperative has to be filed at the Employer Register as a regular employer if there are at least two employees paid regularly and uninterruptedly during one year or if at least six employees are working with interrupted employment periods.
The cooperative must be filed at the Prepayments Register, if it conducts business or pursues a profession, just to mention some examples. Any payer of work compensation can verify the status of worker or service provider on-line by contacting the public YTJ information service or by telephone at the Tax Administration.
More information is available on the website of the Tax Administration or from customer service points. The forms and their filling instructions are available from YTJ information service.
As soon as the notification of incorporation has reached the Finnish Patent and Register Office, the ELY center, the Digital and Population Data Services Agency, or the Tax Administration, the notification is filed in the Business Information System, and the entity is given a business ID, the so-called Y-tunnus. This ID must be used when dealing with the Tax Administration and in the letters and forms (orders, offers. Invoices) of the undertaking.
6. Business License
Certain sectors and livelihoods may be limited and regulated by law. These sectors include safety, health and financial risks. These sectors are called regulated sectors. The traders in these sectors are usually submitted, in addition to their filing at the Trade Register, for a specific registration by the authorities, a license or concession or approval. Mostly, this license is granted, or the registration is filed by the Regional State Administrative Agency of the registered office, but in some cases by a special authority or body.
The license delivered by the Regional State Administrative Agency (AVI) is required, among others, for selling alcohol in restaurants and outlets, grocery stores selling low alcoholic drinks, and establishments providing 24-hour social and health services. Recovery of debts for the account of a third-party requires the license of the Regional State Administrative Agency of Southern Finland. Estate and housing agencies and companies keeping companion or sports animals professionally or extensively must file an application at the Regional State Administrative Agency’s corresponding register.
The ELY center grants the licenses for transport by taxi and freight traffic, public transportation, and scheduled traffic. Operators of package tours must be filed at the Finnish Competition and Consumer Authority (FCCA) register and lodge a deposit. The National Police Board grants licenses for private security services and weapon trade. Contractors in the electricity and lift/elevator sectors have to file a notification at the Finnish Safety Technology Authority (TUKES) before starting their operations. Organizers of public events (any entertainment, competition, or show) must file a written notice at the local police.
Before starting any accommodation activity, a notification must be filed to the health inspector of the municipality. And every incoming traveler at the tourist establishment must be notified. In addition to hotels, this obligation applies to agro-tourism, bed & breakfast, and other accommodation facilities, like rental of holiday homes and camping areas. The accommodation provider must submit information relating to foreign travelers to the local police station.
7. Notification for Food Premises
Food premises must be notified to the food control authority of the municipality of the establishment before the start or essential modification of operations. Food premises are, e.g., grocery stores, kiosks, restaurants, and canteens.
The notification is not necessary if operational risks are low for the food safety and
- the food sector activities are happening at the same premises as the other livelihoods of the
- the actor is a private individual or
- the activity can’t be qualified as a livelihood.
However, any professional activity must always be notified, even with low risk.
More details of the acceptance of food premises are available on the Evira website.
8. Acceptance procedure according to the Health Protection Act
According to the Health Protection Act, the operator has to submit a written notice to the health protection authority of the municipality at the commissioning of the following premises or at the start of the following activities: public assembly or accommodation premises, public saunas, swimming pools and spas, animal shelters, buildings and corrals situated on planning areas, hairdresser’s, barber’s and manicure salons, personal grooming establishments, tattoo and solarium establishments. Additional information is available from municipal href=”http://www.kunnat.net” target=”_blank”>health protection authorities.