Trigger 6

1. How does the company form affect the financial situation of a company?

If you set up a trade name (toiminimi) the initial costs are low.

You have to register your company to trade register (kaupparekisteri). You can do it online and it costs only 75 €, you don't need at all any other capital money. Once you have leave your notification, they will search if there is any obstacles for your company name, so before registering you should really think about the name and wait until it's confirmed by the trade register.

In trade name single-entry bookkeebing is usually enough. 

In trade name you are responsible for the company's obligation with your entire personal property.

In this case, corporation is more likely better option. The initial costs are 330 € and you can do the registration in online. You also have to have at least 2500 € of capital stock. Corporation is a good option if you are not alone in the business, if you already know that you want to expand your business, maybe take new partners in the future or if your turnover limit is going to be more than 100 000 €.

In this form, you always have to have double entry bookkeeping. 

If the business is going badly and the company is bankrupt, owners will lose their capital investments but they are not responsible with their personal property.

If the business is going good, shareholders can get money from the company's profits as an dividend.

2. What are the financing options for start-up?

First of all you should contact your local work and business administration (te-toimisto) and ask if can have a start-up grand. It's not much but you can have it the first 6-12 months so that way you will have some incomes.

If you have an innovative idea you could asks money from discovery foundation.

Tekes usually gives money if your business is aiming for international markets.

You can apply for funding also from Finnvera or ELY-keskus (centre for economic development, transport and environment). You can also apply loan from bank or insurance company.

3. What should you know about taxes as an entrepreneur?

In trade name you have to pay income tax from your profit.

VAT is required when the annual turnover exceeds 10 000 €.

Advance tax, you have to estimate your revenue.

In corporation there is corporate tax (you pay 20% tax from profit), advance tax, VAT and corporation owner tax (if you pay the salary for yourself -> progressive taxation, if you get dividends those are earnings or capital income. Part of the dividend is tax-free).

4. How to make a budget for a start-up?

Sales budget

Marketing budget

Profit plan

Turnover

- variable costs

= sales margin

- fixed costs
= operating profit

- cuts

= business results

- interest + others financial expences

= profit before taxes

Sources:

www.prh.fi

https://www.vero.fi/yritykset-ja-yhteisot/tietoa-yritysverotuksesta/yritys_tyonantajana/verohallinnolle_maksettavat_ja_ilmoitet/

https://yrityksen-perustaminen.net/yrityksen-verotus/#omistajanverotus