If you are a private trader, you do not need a formal procedure or a special reason to terminate your business.
When you want to close down your private trader company:
Terminate all your business activities and pay related debts.
Also give up any business assets. If your company has business mortgages (assets used as collateral for funding), amortize or transfer them to another company.
Finally, notify the termination of your private trader company to the Trade Register and the Finnish Tax Administration. Submit a notification as soon as your business operations have ended, you have paid the debts of your private trader company and waived its assets.
Once your notification is registered, your company will be removed from the Trade Register and the Finnish Tax Administration’s registers.
Send the required notifications to the authorities and make all payments by the due date even if your business operations have ended much earlier. For example, make sure to file the annual tax returns, and pay value added taxes and employer’s contributions. When your business activities end, check the amount of prepaid tax. If necessary, seek changes to tax prepayments so that you do not pay too much or too little in taxes. More information on corporate taxation
Remember to cancel all the insurance policies and other agreements connected to your business operations.
Note that anyone can use the name of the terminated company once your termination notification has been registered. If you are planning to resume your business activity at a later date, consider suspending your business instead of closing it down.
When you close down your private trader company, you have to give up your company’s assets. This means that you either have to sell the assets or transfer them to take them into private use.
Assets include any and all assets of the company, such as cash money, funds in a bank account, machinery, equipment, vehicles or products in stock. So, assets include not only money but also the items and equipment that your company has. If you take assets into private use, they are appraised at fair market value, which affects your company’s profit for the final tax year.
However, you can reduce taxation by applying for income spreading. You are eligible for income spreading if the conditions for it are met. In income spreading, one-off income is distributed over several years, so that the tax rate does not become unreasonably high in the year when the income was received. Income spreading must be claimed from the Finnish Tax Administration before the tax adjustment for that year is completed. You can submit the claim electronically in the MyTax serviceOpens in a new window. or when submitting a tax return, ordering a tax card or making a change to tax prepayment. For more information on income spreading, see the Finnish Tax Administration’s page in Finnish and Swedish on self-employed individuals: Business assets and liabilities when terminating operationsOpens in a new window..