Financial statements for a dormant Finnish company: a do-it-yourself guide

This guide explains what the financial statements (tilinpäätös) of a dormant Finnish limited company (osakeyhtiö) must contain, who signs them, how they are adopted and where they are filed. It is based on the Accounting Act (kirjanpitolaki, KPL), the Limited Liability Companies Act (osakeyhtiölaki, OYL), the Government Decree on small and micro company financial statements (PMA) and guidance from the Finnish Tax Administration (Verohallinto) and the Finnish Patent and Registration Office (PRH).

What is a dormant limited company?

In this guide, a dormant company means a limited company that had no business activity and not a single bookkeeping entry during the financial year (tilikausi). The company exists and is entered in the trade register (kaupparekisteri), but it had no sales, no expenses and no salaries, and it paid no dividends.

In Finnish, such a company is often called a "desk drawer company" (pöytälaatikkoyhtiö). The label changes nothing: having no activity does not remove a limited company's obligations.

Does a dormant company have to prepare financial statements?

Yes. A limited company must prepare financial statements for every financial year and file them with the trade register, even if it had no activity at all. According to the Finnish Accounting Board (kirjanpitolautakunta), the obligation is absolute (KILA 1770/2005), and PRH reminds companies that even a dormant company must file its financial statements.

The company must also file the corporate tax return 6B (veroilmoitus 6B) with the Tax Administration for every financial year. The Tax Administration states that the return must be filed even if the company did not conduct business or any other activity.

The financial statements must be prepared within four months of the end of the financial year (KPL 3:6). All deadlines, with examples, are in our deadlines guide.

What do the financial statements of a dormant company contain?

The financial statements consist of a balance sheet (tase), an income statement (tuloslaskelma) and notes (liitetiedot). The smallest companies, micro companies (mikroyritys), may prepare them under the micro company rules of the decree (PMA chapter 4), which reduces what has to be presented.

The balance sheet shows the company's assets and how they are financed at the end of the financial year. On the assets side (vastaavaa), a dormant company may have nothing more than cash and bank balances (rahat ja pankkisaamiset). On the equity and liabilities side (vastattavaa) is the equity: share capital (osakepääoma), any reserve for invested unrestricted equity (SVOP), retained earnings from previous years and the result for the financial year. If the company has debt, a micro company must show the amount of short-term debt separately (PMA 4:2).

The income statement must always show revenue (liikevaihto), the profit or loss for the financial year and the subtotals written in capital letters, such as LIIKEVOITTO (-TAPPIO), operating profit or loss (PMA 2:7). Line items that are zero in both the current and the previous year are left out (PMA 2:8). The income statement of a dormant company is therefore short, and both revenue and the result are zero.

In the notes, a micro company presents the notes required of a small company, except for information on fair values (PMA 4:4). Each item is only presented if it applies. For a dormant company this in practice means the average number of employees (zero) and a statement that the financial statements were prepared under the micro company rules.

The statement must be given in the notes or next to the signatures (PMA 1:1). There is no official wording, but this Finnish sentence is commonly used:

Tilinpäätös on laadittu pien- ja mikroyrityksen tilinpäätöksessä esitettävistä tiedoista annetun valtioneuvoston asetuksen (1753/2015) mikroyrityssäännösten mukaisesti.

Are comparison figures required?

Yes. For every item in the balance sheet and the income statement, the corresponding figure from the previous financial year must be presented (KPL 3:1). In the first financial year there is no previous year, so there are no comparison figures.

You take the comparison figures from the previous year's financial statements. When the company has had no entries, the balance sheet items stay the same. The previous year's result has moved to the retained earnings line, and the current year's result is zero.

Who signs the financial statements?

The financial statements are dated and signed by the board of directors (hallitus) and the managing director (toimitusjohtaja), if the company has one (KPL 3:7). PRH's guidance says they must be signed by a board with a quorum and by the managing director, if there is one.

In a small company the board may consist of a single ordinary member. In that case the board must also have at least one deputy member (OYL 6:8). The ordinary member signs the financial statements alone. The deputy only signs when acting in place of the ordinary member.

Annual general meeting or written shareholders' decision?

The financial statements are adopted by the annual general meeting (varsinainen yhtiökokous), which must be held within six months of the end of the financial year (OYL 5:3). The meeting decides on:

• adopting the financial statements
• the use of the profit shown on the balance sheet
• discharging the management from liability (vastuuvapaus)
• electing and paying board members, if their term ends

These decisions must be made even if the result is zero or a loss. A typical decision reads: "Tilikauden tulos 0,00 euroa kirjataan edellisten tilikausien voitto (tappio) -tilille. Osinkoa ei jaeta." In English: the result of 0.00 euros is booked to retained earnings and no dividend is paid.

No meeting is needed if the shareholders decide unanimously. Such a written shareholders' decision (osakaspäätös) must be recorded, dated, numbered and signed (OYL 5:1). If there are several shareholders, at least two of them must sign it. A sole shareholder signs it alone.

How are the financial statements filed?

Even a dormant company has two filings to make:

1. The tax return 6B to the Tax Administration within four months of the end of the last calendar month of the financial year. Read more in the tax return 6B guide.
2. Registering the financial statements with the trade register within two months of their adoption (OYL 8:10). You can do this in OmaVero as an attachment to the tax return 6B, or directly in the YTJ service. Read more in the PRH filing guide.

The financial statements are only filed with PRH once they have been adopted.

How long must the financial statements be kept?

The financial statements and the accounts must be kept for at least 10 years from the end of the financial year. Vouchers, correspondence and other material must be kept for at least six years from the end of the year in which the financial year ended (KPL 2:10).

When do you need an accountant?

Ei Liiketoimintaa is built for companies that had no transactions at all during the financial year. You need an accountant if:

• the company had sales or expenses, including bank charges
• the company paid salaries
• the company paid dividends or returned capital
• the previous year's financial statements are missing, so there are no comparison figures (does not apply to the first financial year)

In these cases the financial year has bookkeeping entries, and the financial statements require proper bookkeeping.

Create your financial statements for free

With Ei Liiketoimintaa you answer a few questions and enter the previous year's figures. The service prepares the financial statements under the micro company rules, adds the comparison figures and produces signature-ready PDFs: the financial statements, the balance sheet book (tasekirja), the annual general meeting minutes and personal filing instructions with your deadlines. Your data stays in your browser. You file in OmaVero and YTJ yourself.

Note that the service and the documents it produces are in Finnish.

Create your financial statements