toiminimi

Toiminimi is the Finnish term for a sole proprietorship or a registered trade name used by a single person to run a business in Finland. It is the simplest and most common form of business for individuals who want to operate without creating a separate legal entity. The owner and the business are legally one and the same.

To operate under a toiminimi, the business name must be registered with the Finnish Patent and Registration Office (PRH). Registration provides a business identity number and enables registration for taxes and administrative obligations such as value added tax (VAT) and payroll taxes as needed.

A toiminimi is not a separate legal entity; the owner has unlimited personal liability for the debts and obligations of the business. This means personal assets can be at risk in case of business losses. The owner retains full control over decisions and operations.

Profits from a toiminimi are taxed as the owner’s personal income, though the business keeps its own accounting records. The owner must maintain adequate books and file tax returns. If turnover or other criteria require it, the business may register for VAT and must comply with invoicing and reporting rules. Self-employed earnings may also incur social security contributions and pension insurance obligations (YEL).

Toiminimi is well suited for small, low-risk ventures, freelancers, and start-ups seeking low setup costs and simple administration. For activities seeking limited liability or more complex corporate structures, or for growth, many choose to form a limited liability company (osakeyhtiö) and use a toiminimi as a trading name or later convert.