Government proposal to improve timeliness and reliability of Trade Register
The Government proposes that the services of the Finnish Trade Register would be mainly electronic by 2026. In addition, businesses would be liable to pay a fee if they neglect to submit the necessary information to the register. The aim of the Government proposal is to improve the timeliness, reliability and company security of the Finnish Trade Register.
On 27 October 2022, the Government submitted its proposal to Parliament to amend the Trade Register Act and the Freedom of Enterprise Act.
The Finnish Trade Register is a public register of Finnish businesses. It is administered by the Finnish Patent and Registration Office. The register contains basic information on businesses, and it is used to check the persons responsible for a business, among other things. The information in the register is widely utilised in society.
Aiming to promote digitalisation and company security
At the moment, using the electronic services of the Finnish Trade Register is mainly voluntary. However, the electronic services are being widely used. The Government proposes that in future businesses would have to use electronic services for the most part. All businesses should submit their information to the register electronically. This obligation would not apply to private traders, associations and foundations.
“The reform would make register data more transparent and reliable, which would benefit businesses, authorities and other register users alike. This digitalisation would streamline the services and make things easier for businesses and for the Finnish Patent and Registration Office, which is responsible for the register,” Minister of Employment Tuula Haatainen says.
Another aim is to reduce the risk of company takeovers and other misuse of the Finnish Trade Register. However, the reform should not delay the processing of registration applications or create more administrative burden on businesses. The Finnish Patent and Registration Office offers already services that improve company security. These services are voluntary, but it is highly recommended that businesses make use of them.
Failure to submit information could cost extra
The register must be up-to-date as far as possible to best serve businesses and authorities. To ensure the timeliness of the register, limited liability companies and cooperatives would be obligated to check their own information in the register once a year.
In future, the Finnish Patent and Registration Office could impose a negligence fee on businesses who have not supplied the register with the necessary information. Limited liability companies and cooperatives would be liable to pay a fee if they are late in submitting their financial statement information.
Private traders would not have to register
In future, private traders would not be obligated to register in the Finnish Trade Register. This would not change their obligation to register in other registers, such as the Tax Administration’s registers. Private traders could register in the Finnish Trade Register even in future if they want to. However, on registering they would become subject to the obligations of the register. The reform would not change the fact that only businesses registered in the Finnish Trade Register may register business names that are used in business operations.
Failure to submit financial statement information to the Finnish Trade Register is grounds for removing a limited liability company or a cooperative from the register even under the existing legislation. The Government proposes to amend the legislation so that businesses could be removed from the register even if they neglect to submit information on the beneficial owners referred to in the Act on Preventing Money Laundering and Terrorist Financing,
The Government proposal includes even other amendments. For example, the authorities should retrieve register data from the Finnish Trade Register or other similar source instead of contacting businesses. In addition, the reform would prepare the system for the automatic processing of register applications.
Changes would enter into force gradually
As a rule, the amendments would enter into force in the first half of 2023. However, some of the amendments would not apply until 2025 and 2026. The obligation to use electronic services only would enter into force at the beginning of 2026.
Emily Strohm, Special Adviser to the Minister of Employment, tel. +358 295 047 160
Jyri Oksanen, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 047 123
Liisa Huhtala, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +359 29 504 7062