Do I need to open a business for this?

[rai1984]

Hi,

I am currently working for a company in Finland, in the IT field.

I want to develop few features and solutions in my free time and sell them ... therefore I have some questions because I want to do everything right (legal, taxes and so forth):
- do I need to open a business for this? I assume yes, and then what kind of business? Is this toiminimi the same as private entrepreneur? Is toiminimi enough for doing this kind of business?
- can I open a business where I have the activity on my free time? Is there any conflict with the fact that I am employed?
- if I can open a business/toiminimi/private entrepreneur what are the benefits or disadvantages?
- can I open a business if I don't have an office? I mean to register it at my home address?
- can I close my toiminimi whenever I want?

Thanks in advance!

[Rosamunda]

Hi,

I am currently working for a company in Finland, in the IT field.

I want to develop few features and solutions in my free time and sell them ... therefore I have some questions because I want to do everything right (legal, taxes and so forth):
- do I need to open a business for this? I assume yes, and then what kind of business? Is this toiminimi the same as private entrepreneur? Is toiminimi enough for doing this kind of business?

A toiminimi is probably all you need for this kind of business. The main difference between a TMI and an Oy (limited company) is personal responsibility and risk. If you have a TMI and you run into problems (eg one of your customers tries to sue you for whatever reason) then you are personally liable, ie your personal assets are not protected.

- can I open a business where I have the activity on my free time? Is there any conflict with the fact that I am employed?

No problems. Many many Finns have a salaried job and then a TMI for other activities. Your TMI income is added to the salary from your main job to calculate your global tax rate.

- if I can open a business/toiminimi/private entrepreneur what are the benefits or disadvantages?

If the income from your entrepreneurial activities is more than 8500e per year you have to register as a business and for VAT. The main advantage is that you can deduct business expenses and purchase VAT from your income.

- can I open a business if I don't have an office? I mean to register it at my home address?

Yes. Your home address is fine.

- can I close my toiminimi whenever I want?

I think so (you would just have to de-register it at http://www.prh.fi - same place you register). Though practically speaking I'm not sure why you would need to close it since you can just declare zero revenue (the business remains dorman but you can re-use it at any time without re-registering)

[rinso]

I am currently working for a company in Finland, in the IT field.

I want to develop few features and solutions in my free time and sell them

Make sure your contract with your employer allows it. There can be restrictions if the work is to closely related to your day job.

[Upphew]

I am currently working for a company in Finland, in the IT field.

I want to develop few features and solutions in my free time and sell them

Make sure your contract with your employer allows it. There can be restrictions if the work is to closely related to your day job.

Section 3
Competing activity

Employees shall not do work for another party or engage in such activity that would, taking
the nature of the work and the individual employee's position into account, cause manifest
harm to their employer as a competing activity contrary to fair employment practices.

During the term of employment, employees shall not embark on any action to prepare for
competing activities as cannot be deemed acceptable, taking into account what is stipulated in
paragraph 1.

An employer which recruits a person whom it knows to be impeded from work on the basis of
paragraph 1 is liable for any loss caused to the previous employer jointly with the employee.

http://www.finlex.fi/en/laki/kaannokset/2001/en20010055


So it might be wise to have a discussion with your employer before... there is of course a risk that they make a move to get your potential business.

[CatNip]

This might also be an option for you to start up a small business, cooperative.
Some info in English: http://www.osuustoimintakeskus.net/?page_id=227
Cooperative register: http://osuuskuntarekisteri.pellervo.fi/ ... how&sid=40

If you work thourgh cooperative, you are still entitled to unemployment benefits. If you start up toiminimi, then unemployment benefits are more complicated question.

As others mentioned, you need to confirm with your employer that there won't be any conflict of intrest with your private business.

[rai1984]

This might also be an option for you to start up a small business, cooperative.
Some info in English: http://www.osuustoimintakeskus.net/?page_id=227
Cooperative register: http://osuuskuntarekisteri.pellervo.fi/ ... how&sid=40

If you work thourgh cooperative, you are still entitled to unemployment benefits. If you start up toiminimi, then unemployment benefits are more complicated question.

As others mentioned, you need to confirm with your employer that there won't be any conflict of intrest with your private business.

If we assume the "dark-scenario": you declare 0 revenue for your toiminimi or you close it, and you also are unemployed ... are you still not entitled to get unemployment benefits?

[rai1984]

Hi,

What I want to mention is that the company I work for, its business activity is something else (construction) than IT, but I do work in the IT department ...