Shareholders’ Rights & Shareholder Activism 2026 Comparisons

Finnish law provides for several types of companies. The most common companies are limited liability companies (LLCs), partnerships (general and limited) and co-operatives. The following sections focus primarily on LLCs, which are by far the most prevalent form of incorporation. European Companies (Societas Europaea, SE) may also be established and registered in Finland, but in practice are scarcely used.

LLCs are governed by the Limited Liability Companies Act (LLCA). An LLC may be either private or public. Only a public LLC may have its securities admitted to trading on a regulated market, such as Nasdaq Helsinki. LLCs are legal entities separate from their owners, and shareholders are not personally liable for the company’s obligations. The default statutory purpose of an LLC is to generate profit for its shareholders, although the articles may provide otherwise. The legislation recognises certain special-purpose LLCs, such as housing companies, that are governed by special statues similar to but separate from the LLCA.

Partnerships are regulated by the Act on General and Limited Partnerships. General partnerships are formed by two or more partners who jointly carry on a business under a partnership agreement and are personally liable in full for the partnership’s obligations. A limited partnership allows for one or more silent partners with liability limited to their capital contribution, but requires at least one general partner with unlimited personal liability. A general partner may be an LLC.

Co-operatives are governed by the Co-operatives Act, which is similar to the LLCA. A co-operative is a separate legal person with variable membership and capital. Its members are not personally liable for the co-operative’s obligations. The statutory purpose of a co-operative is to support its members’ economic interests by providing services that members can use, although the rules of the co-operative may provide for a different purpose. Co-operatives hold a significant role in certain sectors of the Finnish economy, including banking, retail and agriculture.

The LLC is the standard corporate vehicle for foreign direct investment due to its internationally recognised structure, limited liability of shareholders, straightforward transferability of shares, and the ability to tailor governance and shareholder arrangements through the articles and shareholders’ agreements. Private LLCs may also be reconfigured to public LLCs if listing on Nasdaq Helsinki (for example) is contemplated.

Limited partnerships are regularly used in private equity and alternative fund structures, particularly for portfolio holding arrangements where tax transparency and flexibility in profit allocation are relevant considerations. In such cases, the general partner is typically an LLC controlled by the fund manager, while the limited partners contribute capital with liability limited to their investment.

There are no general restrictions on foreign ownership in Finnish companies. Foreign investors may acquire shares in both private and public LLCs without prior regulatory approval, subject to merger control rules and sector-specific rules applicable to certain industries (eg, defence, energy, security and certain financial services).

Under the LLCA, all shares carry equal rights unless the articles provide otherwise. The LLCA follows a one-share-one-vote principle, and many companies have only a single class of ordinary shares.

The articles may provide for different share classes with differentiated rights as to voting, dividends or distribution of assets upon liquidation (among others). Golden shares and other bespoke share classes are thus legally permissible. Shareholders’ agreements in private LLCs commonly regulate the practical exercise of shareholder rights between the parties in addition to the articles (see 1.7 Shareholders’ Agreements/Joint Venture Agreements and 1.8 Typical Provisions in Shareholders’ Agreements/Joint Venture Agreements).

Certain shareholder rights under the LLCA are tied to specific ownership thresholds. Shareholders holding at least one tenth of all shares may demand a minority dividend and request the convening of an extraordinary general meeting or the appointment of a special auditor. For public LLCs, the Securities Markets Act imposes mandatory tender offer obligations when a shareholder’s voting rights reach or exceed 30% or 50% of the total votes. A shareholder holding more than nine tenths of all shares and votes has the right to redeem the remaining minority shares at fair value (squeeze-out), and conversely, minority shareholders have a corresponding right to demand that their shares be redeemed (sell-out).

The LLCA is largely a default statute, meaning that shareholders may deviate from many of its provisions either through the articles or by way of a shareholders’ agreement. Only the articles can vary shareholders’ rights, including voting rights, dividend entitlements, transfer restrictions and governance arrangements with an effect on third parties and new shareholders.

Shareholders’ agreements are a common means for varying rights, particularly in private companies and joint ventures. Unlike the articles, which must be filed with the Trade Register and are publicly available, a shareholders’ agreement is a private contract. Shareholders frequently prefer to agree on commercially sensitive arrangements, such as board nomination rights, exit mechanisms or veto rights in a shareholders’ agreement, outside the public register.

While the articles may be used to create share classes with curtailed or enhanced rights, shares with heavily stripped rights risk being recharacterised as mezzanine or debt-like instruments, which may have unintended tax and regulatory consequences. This further incentivises the use of shareholders’ agreements for bespoke arrangements, particularly when it comes to distribution of assets in connection with exits and other liquidation events.

Any amendment to the articles requires a qualified majority of two thirds of the votes cast and the shares represented at the general meeting (see 2.6 Types of Resolutions and Thresholds). Variation of rights through a shareholders’ agreement is governed by the terms of that agreement and general contract law.

A public LLC must have a minimum share capital of EUR80,000. There is no minimum share capital requirement for private LLCs, meaning that a private LLC can be incorporated with a nominal share capital or no share capital at all.

Partnerships and co-operatives are not subject to any statutory minimum capital requirements. Partners in a general or limited partnership contribute capital as agreed in the partnership agreement. Similarly, co-operatives have no fixed minimum capital.

LLCs or co-operatives may be incorporated and maintained by a single shareholder or member. General and limited partnerships require a minimum of two partners.

There are no residency requirements for shareholders or members. However, the LLCA requires that at least one board member be resident in the European Economic Area, unless the Trade Register grants an exemption. The same applies to the managing director, where one is appointed. The Co-operatives Act contains a corresponding provision for co-operatives.

There are no statistics as to what extent shareholders’ agreements are used in privately and widely held companies, such as family held companies. It can be said that shareholders’ agreements are common and widely used in commercial practice. The same applies to joint ventures and partnership structures with limited numbers of participating entities.

In listed companies, shareholders’ agreements between shareholders are rare and problematic, as co-ordinated arrangements may trigger acting-in-concert obligations under the Securities Markets Act, including mandatory tender offer requirements (see 1.3 Types or Classes of Shares and General Shareholders’ Rights).

The widespread use of shareholders’ agreements in private companies reflects the fact that the articles are publicly filed and therefore less suited for commercially sensitive arrangements (see 1.4 Variation of Shareholders’ Rights).

A typical Finnish shareholders’ agreement covers at least the following key areas.

Key Areas

Governance

Board composition and nomination rights, quorum requirements and reserved matters requiring shareholder consent or qualified majorities (including matters such as material acquisitions or disposals, related party transactions, changes to the business plan, material capital expenditure and entry into material agreements).

Transfer restrictions and exit

Lock-up periods, rights of first refusal, tag-along and drag-along rights, and provisions governing the exit process (including IPO and trade sale scenarios).

Financing

Further funding obligations or non-funding rights, anti-dilution protections and pre-emption rights in connection with new share issues.

Share classes and preferences

Liquidation preferences, ranking of securities and dividend rights, where applicable.

Restrictive covenants

Non-compete and non-solicitation undertakings typically imposed on founders, key persons and management shareholders.

Information and inspection rights

Reporting obligations, access to financial information and audit rights, often going beyond the statutory minimum.

Leaver provisions

Vesting schedules and good leaver/bad leaver mechanics for management shareholders, including share purchase or redemption rights triggered by departure.

Confidentiality and IP

Obligations to protect confidential information and assignment or protection of IP.

Dispute resolution

Governing law and arbitration, commonly under the rules of the Arbitration Institute of the Finland Chamber of Commerce.

Shareholders’ agreements may be considerably simpler or more complex, always depending on the situation. Freedom of agreement is restricted mainly by the LLCA’s mandatory provisions, the principle of equal treatment of shareholders, the rules on distribution of funds, and the qualified majority requirements for fundamental corporate actions, to name a few.

Shareholders’ agreements are enforceable as a matter of general contract law and are binding on the parties to the agreement. They do not, however, bind the company itself unless the company is also a party to the agreement, and they cannot override mandatory provisions of the LLCA. Shareholders’ agreements are not public documents and are not required to be filed with any register.       

Annual General Meeting

Every LLC must hold an annual general meeting (AGM) within six months of the end of the financial year. The notice period for an AGM is a minimum of one week in private LLCs and three weeks in publicly listed LLCs. The notice period cannot be shortened below these statutory minimums, but shareholders may waive notice requirements by resolving on matters generally resolved by an AGM unanimously.

The LLCA requires the following matters to be resolved at the AGM:

• adoption of the financial statements;
• distribution of profits;
• discharge from liability of the members of the board, the supervisory board and the managing director (where applicable);
• election and remuneration of the board; and
• appointment of the auditor.

In listed companies, the AGM must also consider the remuneration policy (at least every four years) and the annual remuneration report, both on an advisory basis.

In practice, AGMs routinely also address matters such as authorisations for the board and the election of the chair and vice-chair of the board.

Extraordinary General Meetings

An extraordinary general meeting (EGM) may be convened at any time when required by the articles, by a decision of the board, or at the request of the supervisory board where so authorised. In addition, shareholders holding at least one tenth of all shares may require the board to convene an EGM to consider a specific matter (see 1.3 Types or Classes of Shares and General Shareholders’ Rights). The notice period for an EGM is the same as for an AGM and cannot be shortened below the statutory minimum.

A general meeting is customarily called by the board. Where the company has a supervisory board, it may also call a general meeting if authorised to do so by the articles.

Shareholders holding at least one tenth of all shares (or less if specified in the articles) may require the board to convene an EGM in writing for the purpose of considering a specific matter. If the board fails to issue the notice of meeting within two weeks in a private LLC or one month in a public LLC, the Finnish Supervisory Agency may, upon application, authorise the requesting shareholders to convene the meeting at the company’s expense. The same right to apply for authorisation is available to a board member, a member of the supervisory board, the managing director and the auditor.

Notice of Meetings

All shareholders registered in the company’s share register are entitled to receive notice of a general meeting. In a private LLC, a written notice is sent to each shareholder whose address is known to the company, unless the articles provide otherwise. In a listed company whose shares are registered in the book-entry system, the right to attend the general meeting belongs to shareholders recorded in the share register on the record date, which is eight business days before the meeting. Holders of nominee-registered shares in a listed company may be temporarily registered in the share register for the purpose of attending the meeting (see 2.12 Holding Through a Nominee).

Information Rights at the General Meeting

At the general meeting, the board and the managing director must, upon request by a shareholder, provide more detailed information on matters that may affect the assessment of the items on the agenda. Where the meeting considers the financial statements, this obligation extends to the company’s financial position more generally, including its relationship with other entities within the same group. Information may be withheld only if disclosure would cause material harm to the company. If the information requested is not available at the meeting, a written response must be provided within two weeks.

Information Rights Outside the General Meeting

Outside the general meeting, shareholders of private LLCs do not have a general statutory right to business-related information from the company. The share register is always public and available to anyone (see below), while the minutes of general meetings must be made available to shareholders upon request. Additionally, shareholders holding at least one tenth of all shares may request the appointment of a special auditor to investigate the company’s management or accounts.

For listed companies, the Securities Markets Act imposes continuous and periodic disclosure obligations on the company, including the obligation to disclose inside information without undue delay, to publish periodic financial reports and to make available all information provided to the general meeting. These obligations ensure that all shareholders and the market have equal and timely access to material information.

Inspection of Registers

The share register is public and must be kept available for inspection at the company’s head office or, in the case of a company whose shares are registered in a book-entry system, at the premises of the central securities depository. Anyone is entitled to obtain a copy of the share register or a part of it, subject to reimbursement of the provider’s costs. Certain personal data, such as the identification component of a personal identity number, is excluded from public access.

The LLCA expressly permits shareholders’ meetings to be held remotely. Following the 2022 amendments to the LLCA, there are three available formats:

• a traditional physical meeting at which shareholders may also participate remotely via a telecommunications connection and technical means;
• a fully virtual meeting held without a physical venue, provided the articles so permit; and
• a hybrid meeting combining physical attendance with remote participation and advance voting.

The board decides which format to use, unless the articles restrict or prohibit remote participation. Shareholders participating remotely must be able to exercise their rights in full during the meeting, and the company must ensure that attendance and vote counting are verifiable to the same standard as at a physical meeting.

Since the COVID-19 pandemic, remote and hybrid meetings have become a standard part of general meeting practice in both listed and private companies. Most listed companies now routinely offer advance electronic voting alongside the physical meeting.

The LLCA does not impose any quorum requirement for general meetings. A general meeting is quorate regardless of the number of shares represented, unless the articles provide otherwise. In practice, it is uncommon for private companies to include quorum provisions in their articles, although shareholders’ agreements may set quorum and attendance requirements for meetings (and a mechanism to arrive at quorum).

Resolutions are passed by a simple majority of the votes cast, unless the LLCA or the articles require a qualified majority (see 2.6 Types of Resolutions and Thresholds). Each share confers one vote unless the articles provide otherwise (see 1.3 Types or Classes of Shares and General Shareholders’ Rights).

As for proposals, a general meeting may only resolve on matters included in the notice of meeting or required by law (primarily the LLCA) or the articles. A shareholder wishing to have a specific matter placed on the agenda must submit a written request to the board sufficiently in advance for inclusion in the notice. Matters cannot be added to the agenda at the meeting itself, except by unanimous consent of all shareholders. However, the meeting may at any time resolve to convene a new meeting or to adjourn and continue later, possibly with an amended agenda.

The LLCA provides for ordinary resolutions and qualified majority resolutions.

An ordinary resolution is passed by a simple majority of the votes cast at the meeting. This is the default threshold for all matters unless the LLCA or the articles expressly require a qualified majority (or, as applicable, an even greater majority).

A qualified majority resolution requires the support of at least two thirds of both the votes cast and the shares represented at the meeting. The LLCA requires a qualified majority for fundamental corporate actions, including:

• amendments to the articles;
• directed share issues;
• issuance of option rights and other special rights entitling to shares, mergers, demergers, cross-border transfer of registered office;
• acquisition and redemption of own shares in a public LLC;
• directed acquisition of own shares; and
• placing the company into liquidation.

If the company has several share classes, certain qualified majority resolutions additionally require a two-thirds majority within each share class represented at the meeting.

The qualified majority threshold cannot be lowered by the articles but may be raised. Whether a particular resolution requires a qualified majority is determined by the LLCA and, where applicable, the articles.

Under the LLCA, the board has general competence over the management and organisation of the company’s affairs. Ordinary business decisions, including commercial transactions, operational matters and day-to-day management, fall within the board’s general competence and do not require shareholder approval. Where a managing director has been appointed, the managing director is responsible for the company’s day-to-day management under the direction of the board.

Shareholder approval at the general meeting is required for matters specifically reserved to the general meeting by the LLCA, including the mandatory AGM items described in 2.1 Types of Meeting, Notice and Calling a Meeting and the corporate actions listed in 2.6 Types of Resolutions and Thresholds. In addition, the articles or shareholders’ agreement, where applicable, may reserve further matters for shareholder approval beyond those required by the LLCA. The board may also refer any matter within its general competence to the general meeting.

The required percentage of approval depends on the nature of the resolution: a simple majority of the votes cast for ordinary resolutions, or a qualified majority for the matters specified in the LLCA and/or articles (see 2.6 Types of Resolutions and Thresholds). Certain resolutions may require the individual consent of the affected shareholder.       

Shareholders may vote in person or through a proxy representative. A proxy must present a dated power of attorney or otherwise demonstrate their authority to represent the shareholder.

The LLCA does not prescribe a particular method of voting. The voting method is generally determined by the chair of the meeting. In practice, listed companies use electronic voting systems with full vote counting. Electronic vote casting is specifically permitted by the LLCA, and related procedures have become a common practice.

Weighted voting rights are not permitted in the sense that the LLCA follows a one-share-one-vote principle as the default (see 1.3 Types or Classes of Shares and General Shareholders’ Rights). However, the articles may provide for share classes carrying different numbers of votes per share, which in practice permits differentiated voting power. The articles may also restrict the percentage of votes of a single shareholder – eg, by stating that no shareholder shall have more than 20% of the votes at any AGM/EGM regardless of the number of shares and votes attached to such shares.

Any individual shareholder is entitled to have a matter that falls within the competence of the general meeting placed on the agenda, provided the request is submitted to the board in writing sufficiently in advance for the matter to be included in the notice of meeting (see 2.5 Quorum, Voting Requirements and Proposal of Resolutions). In a listed company, the request is always deemed timely if received at least four weeks before the notice is sent.        

A shareholder may challenge a resolution of the general meeting by filing a claim against the company in court within three months of the date of the resolution. The LLCA provides for two categories of defective resolutions: voidable and void.

A resolution is voidable if:

• the procedural requirements of the LLCA or the articles have not been observed and the error may have affected the content of the resolution or a shareholder’s right(s); or
• the resolution is otherwise contrary to the LLCA or the articles.

A resolution is void if:

• no notice of the meeting was given or the notice requirements were materially breached;
• the resolution requires the consent of a specific shareholder which has not been obtained;
• the resolution clearly violates the principle of equal treatment of shareholders without the required consent; or
• the resolution could not have been validly made even with the consent of all shareholders.

A void resolution is not subject to the three-month time limit, although claims relating to merger, demerger or cross-border transfer resolutions must be ultimately filed within six months of registration.

If the court finds the resolution defective, it may declare it invalid or void, or amend it. The court may also issue an injunction prohibiting the company from implementing the resolution. A judgment declaring a resolution invalid or amending it is binding on all shareholders.       

Institutional investors play a significant role in Finnish corporate governance, typically through engagement-oriented and consensus-driven approaches rather than confrontation. No shareholder groups have any regulated privileges. The most important institutional shareholders in Finnish listed companies are domestic pension insurance companies, whose policies on voting and engagement are publicly disclosed.

A distinctive feature of Finnish corporate governance is the shareholders’ nomination board, which is widely used among listed companies. It typically consists of representatives appointed by the company’s largest shareholders, often institutions, tasked with preparing proposals for the composition and remuneration of the board for the general meeting. The Finnish Corporate Governance Code recommends this model, and it has become prevailing practice among large and mid-cap listed companies.

In private companies, institutional investors often exercise influence through shareholders’ agreements and board representation rather than statutory mechanisms.

Information

Nominee-registered shareholders are entitled to the same information as directly registered shareholders regarding matters to be voted on at a general meeting. The company must publish the notice of meeting and the meeting documents in accordance with the LLCA (see 2.1 Types of Meeting, Notice and Calling a Meeting and 2.3 Information and Documents Relating to the Meeting). In listed companies, the notice and all related documents are made publicly available on the company’s website.

Voting

Nominee-registered shareholders in a listed company may exercise their voting rights by requesting temporary registration in the company’s share register for the purpose of attending the meeting. The request must be made by the record date (eight business days before the meeting). Once temporarily registered, the shareholder may attend and vote on the same basis as a directly registered shareholder. Temporary registration does not require the transfer of the shares out of nominee registration.       

Shareholders may pass a written resolution on any matter within the competence of the general meeting without holding a meeting, provided the resolution is unanimous. The written resolution must be recorded, dated, numbered and signed. Where the company has more than one shareholder, at least two shareholders must sign the resolution.       

Under the LLCA, existing shareholders have a statutory pre-emptive right to new shares in proportion to their existing shareholding. Where the company has multiple share classes, this right must be applied separately to each share class. Private LLCs may deviate from this in their articles. Public LLCs may deviate from the rule by providing in the articles that shares that do not entitle their holders to participate in distributions of the company’s assets also do not carry a pre-emptive right in a share issue.

Companies may deviate from the shareholders’ statutory pre-emptive right by a directed share issue, if there is a weighty financial reason to do so. In assessing whether a directed issue is acceptable, particular attention must be paid to the relationship between the subscription price and the fair value of the share. A directed share issue without payment is permitted only if there is a particularly weighty financial reason for it, having regard to the interests of the company and of all its shareholders. In practice, directed issues for financing purposes, for expanding shareholder base, or for using shares as a means of payment in acquisitions may be considered when implemented with professional advisers.

As a general principle, shares in an LLC are freely transferable and may be acquired without restriction. However, the right to transfer and acquire shares may be restricted by a provision in the articles, provided that the restriction takes the form of one of the two clauses expressly permitted by law: a redemption clause or a consent clause.

A redemption clause may grant the shareholders, the company or another designated person the right to redeem a share transferred to a third party, excluding transfers by the company itself. A consent clause can require the company’s consent for the acquisition of a share by transfer, though this does not apply to shares acquired through compulsory auction or from a bankruptcy estate. Similar restrictions are commonly agreed upon in shareholders’ agreements.

Beyond the LLCA’s transfer restrictions, a proposed disposal may also be subject to various regulatory requirements, particularly in the case of larger or listed companies. These may include public bid and disclosure obligations under the Securities Markets Act, merger control under the Competition Act, and notification or approval requirements for certain foreign acquisitions and acquisitions of qualifying holdings in regulated sectors.

Since shares may generally be transferred and acquired without restriction unless the articles (or, where applicable, shareholders’ agreements) provide otherwise, shareholders are generally free to pledge their shares as security, subject to any validly adopted transfer restriction.

A pledge does not constitute a transfer for the purposes of the redemption and consent clauses discussed in 3.2 Share Transfers, as those provisions concern the transfer and acquisition of ownership rather than the creation of a security interest. However, if the pledge is subsequently enforced through a sale by the pledgee, that sale would constitute a transfer and could therefore trigger any applicable redemption or consent clauses.

Disclosure of Shareholdings Generally

In private LLCs, there is no general obligation for shareholders to publicly disclose their interest. Shareholdings are recorded in the company’s share register, which is public (see 3.2 Share Transfers), but this is a company-maintained register rather than a shareholder disclosure obligation.

All LLCs, partnerships and co-operatives must identify and register their ultimate beneficial owners (UBOs) with the trade register, pursuant to the implementation of the EU Anti-Money Laundering Directives. The UBO register is not publicly accessible without restriction; access is limited to authorities, obliged entities, and others with a legitimate interest.

Company’s Right to Require Disclosure

For listed companies, the Securities Markets Act entitles the issuer to obtain information about its shareholders from custodians and other intermediaries in the holding chain, including the identities of beneficial owners behind nominee-registered holdings. For private companies, the LLCA does not provide a specific right for the company to compel shareholders to disclose their interests beyond the share register.

Notification of Changes in Shareholdings

In listed companies, the Securities Markets Act imposes flagging notification obligations when a shareholder’s ownership or voting interest reaches, exceeds or falls below the thresholds of 5%, 10%, 15%, 20%, 25%, 30%, 50%, two thirds or 90% of the total number of shares or votes. The notification must be made to both the company and the Finnish Financial Supervisory Authority (FIN-FSA), and the company must publish the notification without undue delay. Notably, the 30% and 50% thresholds also trigger a mandatory tender offer obligation (see 1.3 Types or Classes of Shares and General Shareholders’ Rights).

In private companies, there is no equivalent statutory flagging obligation. Changes in ownership are reflected in the share register upon notification of a transfer to the company.

The board may resolve to cancel shares held by the company. No general meeting resolution is required, as the cancellation does not affect the amount of share capital or the shareholders’ relative positions, since the company’s own shares are disregarded – for example, when determining dividend entitlements and voting rights. The cancellation must be promptly notified to the trade register for registration and will only become effective once the cancellation has been registered.

In addition, shares held by a shareholder may be cancelled in certain limited circumstances. In a public LLC, the general meeting may resolve on a share consolidation by which a proportion of all shareholders’ shares is redeemed and cancelled (requiring a qualified majority; see 2.6 Types of Resolutions and Thresholds). The general meeting may also declare shares forfeited if a shareholder fails to claim shares allocated in an issue within ten years. Furthermore, where a company’s shares are entered into the book-entry system and a shareholder fails to register their shares within the prescribed registration period, the general meeting may, after ten years, declare the right to the shares and any related rights forfeited. In each case, forfeited shares are treated as the company’s own shares and may be cancelled, held or transferred by the board.

An LLC can acquire or redeem its own shares, subject to statutory requirements and restrictions. A share buyback is generally resolved by the general meeting (qualified majority in public companies), though the meeting may also authorise the board to resolve it. Such an authorisation may run for up to 18 months, and shares may only be acquired using distributable free equity under such an authorisation.

According to the LLCA, a private LLC may not acquire or redeem all its own shares. Moreover, in a public LLC a resolution to acquire, redeem or accept as security its own shares may not be made if the aggregate number of the company’s own shares held or pledged by the company and its subsidiaries exceeded one tenth of all shares. The one-tenth cap is expected to be abolished under the pending reform of the LLCA.

Shareholders eligible to sell their shares to the company under a buyback resolution must be notified in the same manner as for a general meeting. The resolution and relevant financial information must also be made available to them throughout the offer period, unless this information has already been provided in the meeting notice or disclosed under applicable securities market rules.

As a general principle, shares are acquired from each shareholder in proportion to their existing shareholding. However, the company may also acquire its own shares otherwise than in proportion to existing shareholdings by directed acquisition. A directed acquisition can be made only if there is a weighty financial reason for an acquisition, with particular attention paid to the relationship between the consideration offered and fair value. A resolution of the general meeting must be adopted by a qualified majority.

Furthermore, own shares may be redeemed otherwise than in proportion to the shares held by the shareholders (directed redemption) only with the consent of all shareholders. However, a public company may also, by a qualified majority, resolve on a share consolidation. The articles of an LLC may also contain a clause related to such a redemption.

Resolving

The distribution of funds is generally resolved by the general meeting. However, the general meeting may resolve to distribute an amount exceeding that proposed or approved by the board only where it is required to do so under the LLCA or the articles. The general meeting may also authorise the board to decide on the distribution of dividends or funds from the reserve for invested unrestricted equity, provided that the general meeting resolution specifies the maximum amount available for distribution. Such authorisation may remain in force only until the commencement of the next AGM. The LLCA does not prescribe a fixed dividend payment date, and payment is generally made in accordance with the company’s usual payment arrangements (often yearly, bi-yearly or quarterly).

Distributable Reserves

Subject to the company’s solvency, the company may distribute its unrestricted equity after deducting any amounts that must be retained under the articles and any research and development expenditure capitalised on the balance sheet in accordance with the Accounting Act. The distribution of funds must be based on the company’s latest adopted financial statements, which must be audited where required by law or the articles. In addition, any material changes in the company’s financial position since the preparation of the financial statements must be taken into account. Regardless of available distributable reserves, funds may not be distributed if, at the time of the decision, the company is known or ought to be known to be insolvent, or if the distribution would cause insolvency.

Minority Dividend Right

Shareholders representing at least 10% of the shares may require the company to distribute at least 50% of the distributable profit for the financial year as dividends, provided that the distribution does not exceed the amount that may be distributed without creditor consent or 8% of the company’s equity. The articles may provide otherwise, but any restriction of this minority dividend right requires the consent of all shareholders.

The members of the board are elected by the general meeting by a simple majority vote. The articles may provide that the supervisory board elects the board instead. A board member may be removed before the end of their term by the party that elected them; no cause is required, as the relationship between the company and its board members is based on trust rather than on a fixed contractual term. A board member may also resign at any time by notifying the board.

Shareholders may challenge a decision taken by the board to the extent that the board has exercised authority delegated by the general meeting (eg, under a share issue authorisation). In such cases, the board’s decision may be declared void on the same grounds and through the same procedure as a void general meeting resolution (see 2.10 Challenging a Resolution).

Beyond this, shareholders do not have a direct statutory right to challenge or set aside ordinary business decisions of the board. Additionally, the LLCA does not provide for a general shareholder action against the board’s failure to act or against the substance of a business decision falling within the board’s general competence.

However, shareholders may seek to hold directors personally liable for damages under the LLCA’s liability provisions if the directors have breached their duty of care or otherwise acted in violation of the LLCA or the articles (see 10.2 Remedies Against the Directors). Removing the board members (see 6.1 Rights to Appoint and Remove Directors) is the primary practical remedy for dissatisfaction with the board’s conduct.

The general meeting appoints the company’s auditor. An auditor may only be removed during their term by the party responsible for their appointment (ie, the general meeting), and only for due cause.

Even where an auditor is not otherwise required by law or the articles, shareholders holding at least 10% of all shares or one third of the shares represented at the general meeting may require an auditor to be appointed. Furthermore, if the general meeting does not appoint an auditor despite such a request, a shareholder may apply to the Finnish Patent and Registration Office for the appointment of an auditor within one month of the meeting.

Private companies are not required to report on their corporate governance arrangements beyond the general information included in the financial statements and the management report under the LLCA and the Accounting Act.

Listed companies are subject to substantial reporting obligations. Under the Securities Markets Act, a listed company must publish an annual corporate governance statement, either as part of the management report or as a separate document. This statement must describe the company’s governance structure, board composition, committees, internal control and risk management systems, and related party transaction policies.

In addition, the Finnish Corporate Governance Code (FCGC), maintained by the Securities Market Association, provides a comprehensive set of recommendations on governance, transparency and remuneration for listed companies. The FCGC operates on a comply-or-explain basis: listed companies are expected to comply with its recommendations and, where they depart from a recommendation, they must report and explain it. The FCGC requires disclosure of, among other things, board member independence assessments, descriptions of board committees and activities, remuneration policies and reports, and the activities of the shareholders’ nomination board (see 2.11 Institutional Shareholder Groups).

Finnish law does not impose specific duties on a controlling company towards the minority shareholders of its subsidiary solely by virtue of the parent-subsidiary relationship. There is no statutory concept of group management duty or obligation to act in the interest of the group as a whole.

However, a controlling shareholder is subject to the general principles of the LLCA that protect minority shareholders. In particular, the principle of equal treatment prohibits the company’s organs from taking any action that would confer an undue advantage on a shareholder or any other party at the expense of the company or another shareholder (see 1.3 Types or Classes of Shares and General Shareholders’ Rights). A shareholder that contributes to a breach of the LLCA or the articles may be held liable for damages caused to the company, other shareholders or third parties.

In listed companies, transactions between the company and its related parties, including a controlling shareholder, are subject to additional scrutiny. The company must disclose material related party transactions that are not carried out in the ordinary course of business or on market terms, and the board must ensure that such transactions are assessed with appropriate safeguards to prevent abuse.

In insolvency, shareholders are residual claimants. They are not personally liable for the company’s obligations (see 1.1 Types of Company), and their exposure is limited to the invested capital.

In voluntary liquidation, liquidators must first pay all known debts and then distribute the remaining net assets to shareholders in proportion to their shareholdings, unless the articles (or, where applicable, a shareholders’ agreement) provide otherwise.

In bankruptcy, the company’s assets are distributed to creditors in the order of priority prescribed by the Act on the Order of Priority of Creditors. Shareholders rank last and receive a distribution only after all creditor claims are satisfied in full, which rarely occurs in practice.

Under the Restructuring of Enterprises Act, a company may undergo court-supervised restructuring as an alternative to bankruptcy. Since the 2026 reform, a restructuring programme may include a conversion of debt into equity, which may dilute or extinguish existing shareholders’ interests. Shareholders are entitled to vote on such a programme and may challenge it if their position would be worse than in bankruptcy.

The primary remedy for the shareholders against the company is challenging general meeting decisions, which is discussed in 2.10 Challenging a Resolution.

Additionally, a shareholder may apply to the Finnish Supervisory Agency for a special audit of the company’s administration, accounting, or specific transactions or events. The proposal for the special audit must first have been considered and supported at a general meeting by shareholders holding at least 10% of the shares or one third of the shares represented at the meeting. The application must be filed within one month of the general meeting. The Finnish Supervisory Agency must hear the company’s board and, where relevant, the person whose actions are subject to the audit.

Furthermore, shareholders have specific remedies available in certain circumstances, including:

• requiring the general meeting to elect an auditor even where the company is otherwise exempt (see 6.3 Rights to Appoint and Remove Auditors);
• compelling a statutory minimum dividend distribution, overriding the board’s or majority’s preference to retain profits (see 5.1 Payments of Dividends); and
• requiring the board or the managing director to provide the general meeting with further information on matters that may affect the assessment of an issue being considered at the meeting.

Members of the board, the supervisory board and the managing director may be liable for losses caused to the company, its shareholders or third parties through intentional or negligent breaches of their duties under the LLCA or the company’s articles.

Where liability arises from a breach of the LLCA or the articles, negligence is generally presumed unless the person responsible can show that they acted with due care. 

Shareholders may, in certain circumstances – including in cases involving the liability of management (see 10.2 Remedies Against the Directors), other shareholders, the general meeting or the auditor – bring a claim in their own name to recover compensation on behalf of the company where the company is unlikely to pursue the claim itself. This requires either that the shareholders bringing the claim hold at least 10% of the company’s shares, or that failing to pursue the claim would be contrary to the principle of equal treatment of shareholders.

The company must generally be given an opportunity to be heard. Shareholders bringing the claim are initially responsible for the legal costs but may recover those costs from the company to the extent that the proceeds obtained for the company are sufficient to cover them. However, any compensation recovered through the claim belongs to the company, not to the individual shareholders.

Where the person liable has been granted a discharge from liability by the general meeting, the claim must generally be brought within three months of the relevant resolution, subject to certain exceptions relating to a special audit.

Finland does not have legislation specifically designed to regulate or restrict shareholder activism. Activist shareholders operate within the general framework of the LLCA and the Securities Markets Act, which provide both the tools available to activists and the constraints on their conduct.

Key Regulatory Constraints

The most significant constraint on shareholder activism in listed companies is the mandatory tender offer obligation under the Securities Markets Act. A shareholder whose voting rights reach or exceed 30% or 50% of the total votes must make a mandatory tender offer for all remaining shares and other special rights entitling to shares (see 1.3 Types or Classes of Shares and General Shareholders’ Rights). This effectively functions as a poison pill embedded in statute, discouraging activists from building large positions without being prepared to acquire the entire company. The acting-in-concert rules further constrain co-ordinated activist campaigns: if several shareholders co-operate to exercise influence, their holdings may be aggregated for the purposes of the tender offer thresholds. The flagging notification obligations (see 3.4 Disclosure of Interests) also limit the ability of activists to build positions quietly.

Tools Available to Activist Shareholders

The LLCA provides activist shareholders with several statutory tools:

• the right to require an EGM with a 10% shareholding of total shares (see 2.2 Procedure and Criteria for Calling a General Meeting);
• the right to place items on the AGM agenda (see 2.5 Quorum, Voting Requirements and Proposal of Resolutions and 2.9 Shareholders’ Rights Relating to the Business of a Meeting);
• the right to demand a minority dividend with a 10% shareholding (see 5.1 Payments of DIvidends);
• the right to request a special audit with a 10% shareholding (see 10.1 Remedies Against the Company);
• the right to challenge general meeting resolutions (see 2.10 Challenging a Resolution); and
• the squeeze-out and sell-out mechanism at a 90% ownership threshold, which in recent years has been used with increasing frequency, at times in an opportunistic manner, both by majority shareholders seeking to take companies private and by minority shareholders seeking to compel a buyout at fair value (see 1.3 Types or Classes of Shares and General Shareholders’ Rights).

The key aims of activist shareholders in Finland vary depending on the type of activist and the situation, but the common denominator is most often financial benefit.

On one end of the spectrum, activists may seek to improve a company’s market valuation by advocating for changes to strategy, spin-off of certain businesses, demergers to unlock hidden values, capital allocation (eg, increased dividends or share buybacks), board composition or operational efficiency. This type of activism typically relies on transparent market conduct, public engagement and the exercise of statutory shareholder rights, and is broadly consistent with the regulatory framework’s emphasis on fair, transparent and predictable market behaviour.

On the other end, majority shareholders or strategic acquirers may pursue the delisting and privatisation of listed companies, aiming to acquire the remaining shares at the lowest possible price. This has been an area of growing tension in Finland in recent years, with minority shareholders and market commentators pointing to what they view as opportunistic use of the squeeze-out mechanism by controlling shareholders or similar consortiums.

In summary, the aims of shareholder activism in Finland are highly case-specific and range from value-enhancing governance engagement to economically driven take-private strategies.

Stakebuilding

Gradual accumulation of shares through open-market purchases is a common strategy in Finland, both for aggressive activists and for strategic investors seeking to increase influence. Stakebuilding is subject to flagging obligations starting at 5% (see 3.4 Disclosure of Interests) and mandatory tender offer obligations at 30% and 50% (see 1.3 Types or Classes of Shares and General Shareholders’ Rights).

Engagement and Escalation

Activist shareholders in Finland typically begin with private engagement, approaching the board or management directly with their views on strategy, capital allocation or governance. If private dialogue does not produce results, the activist may escalate by making public statements, writing open letters, placing items on the AGM agenda (see 2.9 Shareholders’ Rights Relating to the Business of a Meeting) or campaigning for changes to the board composition through the shareholders’ nomination board process (see 2.11 Institutional Shareholder Groups). Anglo-Saxon-style proxy campaigns are uncommon in Finland, reflecting the consensus-oriented Nordic governance culture.

Statutory Tools as Leverage

Activists may use the statutory minority rights as strategic tools to put pressure on the company: requesting an EGM, demanding a minority dividend, or applying for a special audit (see 11.1 Legal and Regulatory Provisions). These tools serve as credible leverage points even where the activist does not ultimately intend to exercise them.

Take-Private Strategies

As noted in 11.2 Aims of Shareholder Activism, controlling shareholders may build their stake towards the 90% squeeze-out threshold through open-market purchases and tender offers. The agenda in such cases is straightforward: to delist the company and obtain full ownership at a price that the controlling shareholder considers attractive.

Shareholder activism in Finland has not concentrated in any particular sector or industry. Unlike larger European and US markets, where healthcare, technology or industrials have been disproportionately targeted, the Finnish market may be too small and the number of activist campaigns too limited for meaningful sector-specific patterns to emerge. The healthcare sector has seen somewhat more assertive shareholder behaviour in recent decades, but this appears driven by the commercial dynamics of that industry rather than by a broader activism trend.

In terms of market capitalisation, activist activity in Finland has tended to focus on small and mid-cap listed companies, consistent with global trends. Smaller companies are more susceptible to stakebuilding and offer a more realistic path to the control thresholds (30%, 50% and 90%) that trigger mandatory tender offer and squeeze-out rights. Large-cap companies listed on Nasdaq Helsinki have not been immune to shareholder engagement, but full-scale activist campaigns targeting them remain uncommon.

More broadly, the most notable recent trend in Finland has been the increase in take-private transactions and squeeze-out proceedings (see 11.2 Aims of Shareholder Activism), which cut across sectors and are driven by the financial logic of acquiring undervalued companies rather than by sector-specific governance concerns. Finnish shareholder activism is perhaps best characterised by a non-discriminatory pursuit of financial advantage, where the target’s sector is secondary to its perceived undervaluation or governance weaknesses.

A prominent form of activist behaviour in Finland in recent years has been take-private transactions, in which a controlling or significant shareholder forms a consortium with a private equity sponsor or similar financial partner to acquire all remaining shares and delist the company. Recent examples include the Ahlstrom-Munksjö transaction by Ahlström Capital and Bain Capital in 2020–2021, and the Purmo Group transaction led by Apollo and Rettig in 2024–2025. The offers often include a premium to the prevailing market price but create a total valuation that minority shareholders may view as insufficient.

Private equity firms have become increasingly active participants in the Finnish market. Private equity-driven activism is characterised by a medium-term investment horizon, with a planned exit typically within three to five years through a trade sale, secondary buyout or re-listing. Hedge fund activism remains limited, although active ownership strategies are gaining ground among domestic and Nordic investment firms.

Domestic institutional investors – particularly pension insurance companies (see 2.11 Institutional Shareholder Groups) – exercise influence primarily through the nomination board process and private engagement rather than public campaigns. Their role is more akin to stewardship than activism in the traditional sense, but their voting power makes them important actors in contested situations.

No consolidated statistics are available for the Finnish market regarding the proportion of public activist demands met. This may reflect the fact that shareholder activism has been relatively uncommon in Finland compared to bigger markets. The lack of high-profile activist campaigns may reflect Finland’s well-functioning corporate legislation and corporate governance framework, as well as business culture that places emphasis on responsibility and consensus-building rather than confrontation.

Responding to Activism

In Finland, the board plays a central role in responding to shareholder activism. The board controls the company’s communication and decision-making, and public responses to an activist’s demands or proposals will typically be board-led. Private dialogue between the board or management and the activist shareholder is the most common first step, and many activist situations are resolved behind the scenes without public escalation.

Finnish law does not permit American-style poison pills or similar structural anti-takeover devices. The mandatory tender offer obligations (see 11.1 Legal and Regulatory Provisions) serve as a statutory safeguard but cannot be deployed selectively as a defensive measure. Importantly, the Securities Markets Act imposes a duty on the board of the target company to promote the completion of a public tender offer. Once a tender offer has been announced, the board may not, without the approval of the general meeting, take actions that may frustrate or materially impede the offer, such as exercising a share issue authorisation. The board must publish a reasoned opinion on the offer, including whether it recommends that shareholders accept or reject it.

In addition, Finland has a national Takeover Code, issued by the Securities Market Association on a comply-or-explain basis. The Takeover Code provides detailed recommendations on the conduct of the target company’s board and the offeror during a public tender offer, supplementing the statutory framework.

Practical Prevention

The most effective defence against shareholder activism is transparent, well-communicated and shareholder-oriented corporate governance. Companies that maintain open dialogue with their shareholder base, explain their strategy clearly and address legitimate concerns proactively are less likely to attract activist campaigns.

Structural measures may also help:

• the articles may include share classes with multiple votes per share, voting caps or enhanced majority thresholds for specific decisions, although overly restrictive provisions may themselves attract criticism;
• listed companies should make use of their right to identify shareholders to monitor changes in their shareholder base and detect potential activist interest at an early stage;
• maintaining a pipeline of board candidates strengthens the board’s position against activist proposals; and
• having a prepared response framework with designated advisers and communication protocols enables prompt and structured reactions.