Question for English-speaking entrepreneurs

FinnBrit · Post by **FinnBrit** » Thu Oct 23, 2008 12:32 pm

Hello!

I am going into business with a friend and we need to lay out the terms of our co-ownership. Who's responsibility is what, how to divide the profits (let's hope), who has the right to act on the company's behalf, etc. I spoke to my father-in-law (a successful Finnish businessman) and every time he has begun a new enterprise with someone he has used a template on which to base his agreement. Has anybody seen such a template? Do you have one that I could look at (confidential details removed first of course). If not, how did you manage this hurdle when establishing your business with a business partner?

Thank you in advance for any (useful) comments you might have!

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Rosamunda · Post by **Rosamunda** » Thu Oct 23, 2008 9:55 pm

I think you could ask the T&E Centre (TE Keskus) for those templates (check the website, you might be able to download them).

www.te-keskus.fi Espoo is under the Uusimaa district.

The T&E centre can help you choose which company structure suits you best (eg: General Partnership or Limited Partnership. Eg, for a general partnership you need a Avoimen Yhtiö Yhtiösopimus template. The agreement must be submitted when you register the company (cost is 100€ per partner I think, on top of the usual registration fee).

FinnBrit · Post by **FinnBrit** » Fri Oct 24, 2008 9:09 am

Thanks for your reply. I've already contacted TE-Keskus, who directed me to Yritus-Helsinki. I had one meeting with them and now my adviser is on sick leave for 6 - 8 weeks:)

JimmyBang · Post by **JimmyBang** » Fri Oct 24, 2008 4:13 pm

Im sorry,

but, if you asked your inlaw and he said he used a template everytime....cant he tell or give you the template?
(just curious that you seemed to write the answer in your question)

FinnBrit · Post by **FinnBrit** » Mon Oct 27, 2008 10:49 am

Hi Jimmy,

I see your point and I should have been more clear, sorry.

The version he has is in Finnish and very standard. My business partner and I are in more unusual circumstances though so it would require a lot of editing. We would therefore certainly need an English version to understand what and how to edit it. As it's a legal document, I don't think it would be easily translated by a layman (i.e. my wife or father-in-law)..

Pursuivant · Post by **Pursuivant** » Mon Oct 27, 2008 11:07 am

yes well if you are having a Finnish registered company you better have the agreement in Finnish as its the Finnish law you are dealing with in case of disputes, and some of the stuff has to be "by chapter and verse" and translations don't convey the same exact meanings. or you might "think" but the law "thinks" otherwise. so you must get a translation and then an explanation as well.

raamv · Post by **raamv** » Mon Oct 27, 2008 11:16 am

FinnBrit wrote:Hi Jimmy,

I see your point and I should have been more clear, sorry.

The version he has is in Finnish and very standard. My business partner and I are in more unusual circumstances though so it would require a lot of editing. We would therefore certainly need an English version to understand what and how to edit it. As it's a legal document, I don't think it would be easily translated by a layman (i.e. my wife or father-in-law)..

hmmm and here I am thinking that Even if you have a legal document...its not legal unless its in Finnish/Swedish..

Rosamunda · Post by **Rosamunda** » Mon Oct 27, 2008 11:31 am

My recommendation would be to find a lawyer (eg through the TE Keskus) and get it done properly. You wouldn't believe the nunber of family businesses that wind up in the courts

Just because it's friends or family doesn't mean you can dispense with all the formalities. The partnership is an important document. You can prepare something in English and then get a lawyer to verify it and translate it for you.

Why do you want to do a partnership? Wouldn't a limited company be a little less complicated?

raamv · Post by **raamv** » Mon Oct 27, 2008 11:37 am

Yeah..I thought that an Oy would work better in this case..
But then..each to their own..

FinnBrit · Post by **FinnBrit** » Mon Oct 27, 2008 12:24 pm

Thanks for your advice. It will be an Oy, but specifically I will start work immediately for the company whereas my colleague will not start full-time work until a few months later but will do some work on the side of his present employment. We need to put into print a fair way of dividing dividends that goes beyond 50/50 therefore as I will be working more than he..

rinso · Post by **rinso** » Mon Oct 27, 2008 12:42 pm

I don't think you can divide dividend based on workload.
Dividend is based on shares.
Those payments you think of are either salary or bonuses (most likely).

Rosamunda · Post by **Rosamunda** » Mon Oct 27, 2008 1:10 pm

Yeah, well... if the two of you are already nit-picking over a couple of months extra work then I don't give your business relationship hope. You will NEVER find an equitable way to split the workload. It will always seem that one of you is working more than the other, or harder or whatever.

But Rinso is right. Dividends are based on shares in the business.

You would need to pay yourself a salary (which will be taxable, but the first few thousand euros are not so bad and you can use them for off-setting your personal deductibles, like someone to clean your flat, or fix your plumbing etc) - it's not such a bad thing to have a bit of salary.

And er.... how will you survive the first 12 months if you are only getting dividends, no salary????? The dividend pay-out is after the final accounts have been published.

Mook · Post by **Mook** » Mon Oct 27, 2008 2:05 pm

Pursuivant wrote:yes well if you are having a Finnish registered company you better have the agreement in Finnish as its the Finnish law you are dealing with in case of disputes, and some of the stuff has to be "by chapter and verse" and translations don't convey the same exact meanings. or you might "think" but the law "thinks" otherwise. so you must get a translation and then an explanation as well.

This is normal. Many Finnish companies have foreign investors , so lawyers normally produce documents where each paragraph of finnish is followed by a transations. Do you think the Florida grannies would invest in Nokia otherwise?

Pursuivant · Post by **Pursuivant** » Mon Oct 27, 2008 3:32 pm

but its the Finnish version of the law that is official. like you go to http://www.finlex.fi the law "translations" are just that - so you need to "understand" the Finnish way of conducting things and don't assume its done the same way someplace else just because they use a homophone homonym to describe something.

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