toiminimissä

Toiminimi, also known as a sole proprietorship, is a common business structure in Finland. It is owned and operated by one individual, and there is no legal distinction between the owner and the business. This means the owner is personally responsible for all debts and liabilities of the business.

Establishing a toiminimi is relatively straightforward. The owner must register the business with the Finnish Patent and Registration Office and obtain a business ID. They are also responsible for managing their own taxes, including income tax and value-added tax (VAT) if applicable.

The advantages of a toiminimi include simplicity in setup and administration, as well as direct control over the business. However, the significant disadvantage is the unlimited personal liability. If the business incurs debts or faces legal action, the owner's personal assets can be used to cover these obligations.

The owner of a toiminimi reports their business income on their personal tax return. They can deduct legitimate business expenses to reduce their taxable income. While the toiminimi structure is simple, it is crucial for owners to understand their legal and financial responsibilities.

As the business grows, an owner might consider changing their business structure to a limited liability company (osakeyhtiö) to separate personal and business liabilities. However, for many small businesses and freelancers, the toiminimi remains a popular and accessible starting point.