Memorandum of Association and Articles of Association of a limited liability company

With the memorandum of association, you will officially agree with the other shareholders that you will establish a limited liability company. The memorandum of association must include the following:

• name
• shareholders and their subscribed shares
• possible subscription price for the share and the last payment date
• members of the Board
• financial year (must be stated in the memorandum of association or the articles of association)
• possible auditor and deputy auditor
• possible Managing Director
• possible members of the Supervisory Board.

Please note that the Memorandum of Association should not include any information on how your company will operate. Make sure you date the agreement and ensure that all the shareholders sign it.

When you submit your start-up notification with a guided start-up package, the Business Information System will create a Memorandum of Association automatically. In this case, you do not have to draw up a contract separately.

In the Articles of Association, you can agree with the other shareholders about the rules of your company.

The Articles of Association can be very concise. It has to contain at least the following information:

• company name
• domicile in a Finnish municipality
• line of business

You can also record regulations on the following in the Articles of Association:

• representation rights
• annual General Meeting
• number and selection of members of the Board of Directors
• share capital
• number of shares and redemption rights
• any parallel company names.

If you file your start-up notification using a guided start-up package, the Business Information System will create the Articles of Association automatically.  In this case, you do not have to create it separately.

If you file the start-up notification by yourself, attach a written copy of the Articles of Association to the notification.

Note that the information included in the Articles of Association is public. You may, where appropriate, draw up a separate shareholder agreement for your own use.

A shareholders' agreement is not an official founding document of a limited liability company, and it is not mandatory to compile one. However, if there are more than one shareholders, the shareholders' agreement should always be compiled. It creates regulations for the company's operations and provides security in situations of conflict between the shareholders.

Prepare the agreement with the other shareholders in accordance with your company's needs. Agree on all the issues not defined by the Limited Liability Companies Act. For example, you can agree on

• division of labour and responsibility
• financing and distribution of profit
• redemption of shares
• confidentiality, non-compete and intellectual property rights
• accepting new shareholders to the company
• contractual penalties and procedures for settling disputes.

The format of the shareholders' agreement is free. You can create it either before the establishment of the company or at a later date. Generally, it should, however, be written as early as possible. Remember to update the agreement, if the conditions change and the number of shareholders increases.

You can use the services of a legal expert when drafting the shareholders' agreement.