Finland Shareholders' Agreement 2026

1. What should it cover?

2. Common mistakes

3. What happens when there is no shareholders' agreement

Without a shareholders' agreement the company runs on the Act's default rules, and in a conflict those rules satisfy nobody. The Act gives votes in proportion to shares: in a fifty-fifty company, if the shareholders disagree no decision can be taken and the company is effectively deadlocked. The Act contains no mechanism to break that; the way out is a court or one side buying the other, and both are expensive.

The second problem is exit. With no agreement a shareholder can sell their shares to whomever they like, and the other finds themselves with a new co-owner, possibly a competitor. The third is effort: if the assumption that the founders will work full time is not written down, a founder who leaves keeps their shares, and the one who stays goes on splitting the same profit.

4. The four clauses that prevent the fight

The clauses that actually save partnerships are not complicated. First, vesting: shares earned over time, so a founder who leaves early gives part of them back. Second, a right of first refusal: a shareholder wanting to sell must offer to the others first. Third, tag-along and drag-along rights, letting a minority leave on the same terms when the majority sells, or requiring it to.

Fourth is a deadlock mechanism: in fifty-fifty structures, something agreed in advance — an independent third party's casting vote, mediation, or a buy-sell procedure. Alongside these, non-competition, confidentiality and the assignment of intellectual property to the company should be written down; the last of these settles in advance whether something a founder built in their own name belongs to the company.

5. What the articles govern and what the agreement governs

A company's articles of association (yhtiöjärjestys) are public, entered in the register and effective against everyone. A shareholders' agreement is a private contract between the shareholders; it can stay confidential and as a rule binds only those who signed it. That difference decides where each rule belongs: restrictions that need to be effective against third parties go in the articles, while the detail governing the relationship between shareholders goes in the agreement.

The commonest mistake in practice is piling everything into one document. If a clause restricting share transfers appears only in the shareholders' agreement and a shareholder sells to a third party in breach of it, the transfer is usually still valid; damages can be claimed from the shareholder in breach, but the transfer itself may not be stoppable. So whether the transfer restrictions should also have a counterpart in the articles has to be decided at the outset.

6. Exit clauses: the most needed and least written part

When partnerships are formed everyone is well intentioned and nobody wants to discuss separation; yet that is exactly the part of the agreement that earns its keep. Who may leave, on what conditions, at what price; the remaining shareholders' right of first refusal; and what happens on a shareholder's death, incapacity or departure from the company should be written in advance. Without these clauses, an exit usually turns into a negotiation lasting years.

The pricing mechanism matters particularly. A phrase such as "at market value" says nothing at the moment of dispute. How the valuation is to be made — which method, by whom, within what period, and what happens if it is challenged — has to be defined with figures and names. A payment schedule is needed too: the whole sum at once or in instalments, and against what security. This detail lengthens the agreement but shortens the dispute.

7. Breaking deadlock in an equal partnership

A fifty-fifty partnership looks fair but stops the company when no decision can be reached. The board splits, the general meeting produces nothing, and even day-to-day matters start waiting. The risk is invisible at formation; it appears at the first serious disagreement, and by then producing a solution is far harder.

A mechanism for resolving it has to be written into the agreement in advance. Common options are: giving a neutral third party the power to decide specified matters; providing for mediation followed by arbitration; or setting up a mechanism where one side naming a price obliges the other either to sell or to buy at that same price. Whichever is chosen, the trigger condition and the time limits have to be written plainly; a vague clause adds a deadlock to the deadlock.

8. Founder commitment: vesting, non-compete and intellectual property

A founder leaving early while holding a large stake burdens the company for years. The way to prevent that is a vesting mechanism: shares are earned over time and for so long as the person stays, rather than all at once. On an early departure, unvested shares return to the company or the other shareholders at a set price. This protects those who stay and the one who leaves alike, because the rule was known in advance.

Non-compete and intellectual property clauses follow the same logic. Who owns the code, design or brand created for the company has to be stated plainly in the agreement; a domain name or account registered in a founder's own name and never transferred becomes an expensive problem later. A non-compete has to be reasonable in duration, geographic scope and definition; a disproportionate restriction can be held unenforceable in practice and then protects nothing at all.

9. How the agreement affects an immigration file

In an entrepreneur permit application Migri assesses whether the person genuinely works in the company and supports themselves from it. A shareholders' agreement can serve directly as evidence in that assessment: who holds what proportion, who takes a role in management, who will actually work in the company, and how salary and profit distribution are arranged all appear in that document.

So the picture in the agreement and the picture in the application have to be the same. A founder who says in the application that they will work full time, but is defined in the agreement as a passive shareholder contributing only capital, creates a contradiction in the file. Likewise where several shareholders apply for permits at the same time, each one's role in the company has to be defined separately and realistically — and the company's ability to genuinely employ them all has to be shown.

10. When the agreement should be reviewed

A shareholders' agreement is not a document signed once and put in a drawer. When a new shareholder joins, one leaves, investment is taken, the company starts operating in another country, or the shareholders' roles change, the text should be checked against reality. An agreement that no longer matches the facts creates a messier situation in a dispute than having no agreement at all.

A practical habit is to read it together at the time the annual financial statements are prepared: the shareholders are already meeting and the company's position is fresh. Three questions suffice at that review: are the shares and roles still as written, do the exit and valuation clauses fit the company's present size, and is there anything from the past year's transactions that belongs in the agreement. Where a change is needed, updating the text as a whole rather than adding a side letter keeps it readable later.

11. What the Companies Act decides if you never sign one

Without an agreement the company is not ungoverned — it is governed by the Limited Liability Companies Act (osakeyhtiölaki), and the Act runs on majorities. A holder of 51% of the votes decides every ordinary matter at the general meeting alone. A holder of two thirds can rewrite the articles of association. That is precisely the minority's exposure, and it is the same reason an equal 50/50 split with no clause to break a deadlock is the most dangerous cap table in Finland: neither side reaches a majority and nothing can be decided at all.

The Act does give a minority three levers, and they are worth knowing before negotiating for more. Shareholders holding at least one tenth of all shares can force an extraordinary general meeting and can demand the minority dividend: at least half of the financial period's profit distributed, subject to a ceiling of 8% of the company's equity. Above nine tenths of the shares and votes, redemption runs both ways — the majority may buy the minority out, and the minority may require it to. Everything else a founder usually wants — that a co-founder keeps working, does not compete, transfers intellectual property to the company, or sells at an agreed price — the Act does not provide at all. That is what the agreement is for.

Three numbers from outside the Act constrain what the agreement can safely say. A transfer of shares in a Finnish company can carry transfer tax of 1.5% of the consideration, and the return is generally filed within two months of signing, so a redemption clause priced without tax in mind understates the real cost. Financial statements go to the Trade Register within eight months of the end of the financial period, which is the natural annual moment to read the agreement again. And if a shareholder's residence permit rests on running the business, Migri currently looks for at least 30% of the share capital owned personally or at least 30% of the votes: a share transfer agreed purely for commercial reasons can end a permit, so check the immigration effect before signing rather than after.