Toiminimiyrittäjät

Toiminimiyrittäjät, often translated as sole proprietors or sole traders, are individuals who run a business on their own. In Finland, this business structure is known as "toiminimi" or "toiminimiyrittäjä". The key characteristic is that there is no legal distinction between the individual and the business. The owner is personally liable for all business debts and obligations.

Starting a toiminimi is relatively straightforward and requires less administrative overhead compared to other business forms like limited liability companies (osakeyhtiö). Registration is typically done with the Finnish Patent and Registration Office (PRH) and the tax authorities. The owner reports their business income and expenses on their personal tax return.

While offering simplicity and low startup costs, the unlimited personal liability is a significant consideration. This means the owner's personal assets can be used to cover business debts if the business becomes insolvent. For this reason, toiminimi is often chosen by individuals starting small-scale ventures, freelancers, or those testing a business idea with limited financial risk.

Profits generated by the toiminimi are taxed as the owner's personal income. Depending on the income level, this can be advantageous or disadvantageous compared to the corporate tax rates applicable to limited liability companies. Decision-making is entirely in the hands of the sole proprietor, providing maximum autonomy.