toiminimellä

Toiminimellä refers to operating a business as a sole proprietor in Finland. A toiminimi is a business form owned by a single natural person, who can use their own name or a registered business name. The toiminimi itself has no separate legal personality; the owner is personally liable for the business’s obligations.

Starting a toiminimi typically involves registering the business name and obtaining a business identity (y-tunnus) through the appropriate authorities, commonly via the PRH (Finnish Patent and Registration Office) with the YTJ service, and registering for taxation with the Tax Administration. The owner must handle bookkeeping and tax matters, and may need to register for value-added tax (VAT) if turnover passes the applicable threshold. Accounting can be kept with simplified records appropriate for small operations, but annual reporting and record-keeping requirements apply.

Tax treatment differs from a limited company: business income is taxed as part of the owner’s personal income, with allowable deductions for genuine business expenses. In addition, the entrepreneur may be responsible for prepayment tax and, if applicable, VAT payments. For social security, self-employed persons typically arrange pension and health coverage, such as YEL (yrittäjän eläkevakuutus) contributions, based on estimated income.

Advantages of operating tone with toiminimi include simple setup and lower ongoing formal requirements; drawbacks include unlimited personal liability and the absence of separate legal personality. If the business grows or liability protection is desired, converting to a limited company (osakeyhtiö) is an option.