Finland Oy Board and Managing Director Responsibilities 2026

1. Core Board duties

Under the Limited Liability Companies Act the board has one to five ordinary members unless the articles of association provide otherwise, and a board with fewer than three members must also have at least one deputy member. A board with several members needs a chairperson; appointing a managing director is optional. Every one of these people, deputies included, is a responsible person whom PRH contacts about register deficiencies or late financial statements.

2. When can personal liability arise?

Limited shareholder liability does not eliminate personal damages liability for management. Loss caused through breach of the Act, Articles or duty of care can lead to claims.

3. The duties of care and loyalty

The Limited Liability Companies Act places two core duties on board members and the managing director. The duty of care requires decisions to rest on sufficient information and to serve the company; a decision that turns out badly does not by itself create liability, but one taken without preparation or record does. The duty of loyalty requires the company's interest to come before the director's own or a related party's.

In practice what protects both duties is documentation. Minuting board decisions, keeping the information the decision rested on, and having a conflicted member abstain from the vote are the strongest defence when liability is later argued. In a company run without minutes it is close to impossible to show what the decision was based on.

4. The filing duty when equity runs out

The board's most concrete and most frequently neglected task is monitoring equity. When the company's equity turns negative, the board must file that fact with the trade register without delay. The filing is not a declaration of bankruptcy and does not close the company; the entry is public and lets creditors see the position.

Failing to file is one of the classic situations that raises the board's exposure to personal liability: if the company later cannot pay, the transactions of that period and the late filing are weighed together. Where a decision is taken to continue trading while losses grow, minuting the reasoning and the plan it rests on is critical.

5. The EEA residency requirement on the board

The Act requires at least one ordinary board member and, where deputy members are elected, at least one deputy to be resident in the European Economic Area, and the same applies to the managing director. This is where entrepreneurs who set up a Finnish company while living outside the EEA most often come unstuck, and if it is not spotted at incorporation the registration is delayed.

Where the requirement cannot be met, an exemption can be sought from PRH; that is a separate application, it costs EUR 150 in 2026 and it takes time. Two solutions are common in practice: adding a board member resident in the EEA, or starting the exemption process at the same time as incorporation. The company's address for service and who holds the right of representation should be settled in the same breath.

6. The shareholder's side: limited, but not unlimited

An Oy is a separate legal person, and a shareholder as a rule risks only the capital put into it; a company debt does not become the shareholder's debt by itself. That protection is real, but it is pierced in four situations. First, a personal guarantee: one given for a bank loan, a lease or a supplier agreement binds the guarantor directly when the company cannot pay, and it is by far the commonest personal exposure in practice.

The other three are these: an unlawful distribution of profit, where a distribution that damages the company's solvency can be recovered; using company assets for private purposes, that is, not keeping the company's money separate from the shareholder's; and a director's neglect where taxes and pension contributions go unpaid. None of these is removed by incorporating, and all of them are avoided by documentation and by keeping company and personal accounts apart.