Clarissa will soon graduate as a chef from a vocational school. She has also worked in the catering business of a friend of her family during her studies. She cannot wait to start her own business now that her graduation is approaching. Clarissa decides to realise her dream of having a catering business that serves Italian food.
Planning business activities
Clarissa does not know how to run a business. She decides to contact the local Enterprise Agency to get help in setting up her business.
At the Enterprise Agency, Clarissa is told to start by preparing a business plan. The purpose of the business plan is to summarise what the company is about to do and where, what products or services it will sell and to whom, how funding will be arranged and what risks are possibly involved. As soon as her business plan is complete, she can apply for a start-up grant. It helps secure her livelihood during the first stages of her business.
As part of business planning, Clarissa considers which company form to choose. Her top two choices are limited liability company and self-employed person. In the end, a limited liability company seems a better option. Clarissa decides to establish a limited liability company on her own. She names her friend Tuure as a deputy member of the Board of Directors. Limited liability companies require to use double-entry accounting. Clarissa leaves that to a local accounting firm.
The catering business also needs facilities to cook food and store serving and transport equipment. Food hygiene needs to be addressed when selecting the facilities and assessing their suitability for the purpose. Clarissa can use the help of the local food control authority already when acquiring facilities.
Now that the first plans are almost ready, Clarissa decides to put her ideas into action and establish a limited liability company. The easiest way is to do this online on the Business Information System’s website. When Clarissa completes and submits the start-up notification, information about her company will transfer to the Trade Register maintained by the Finnish Patent and Registration Office (PRH) and to the Finnish Tax Administration.
Companies that sell products or services often have a VAT liability. Clarissa can enter her company in the VAT register at the same time as she submits her start-up notification. Clarissa’s accountant at the accounting firm helps her submit VAT returns and pay VAT. In catering activities, VAT is 14% of the service price.
Once she has established her limited liability company, Clarissa formulates the company’s memorandum of association, which also includes the articles of association. The Enterprise Agency helps her with the required documents. While Tuure is a deputy board member in Clarissa’s company, all shares will remain with Clarissa for the time being.
As a self-employed person, Clarissa is responsible for her pension cover. In practice, she needs to take out YEL insurance and pay pension insurance contributions.
Taxation of business activities
Tax must be paid independently on business income during the year, or during the year in which income is earned. To this end, tax prepayments must be requested from the Finnish Tax Administration. Tax prepayments of an individual who has recently started a business are based on an estimate of the company’s profit during the first year. This profit means the business income that remains as a positive amount after business expenses have been deducted from it.
To request tax prepayments, Clarissa estimates her company’s income and expenses.
- facility rent,
- the purchases Clarissa requires for her new business, including serving and cooking equipment, and
- the wages Clarissa pays to herself and others.
After setting up her business, Clarissa was able to start working, and her catering business was an even bigger success than estimated!
Clarissa is about to graduate as a chef from a vocational school. She has already worked in a family friend’s catering business during her studies. Clarissa decides to set up her own catering business. She contacts the local Enterprise Agency to get help in preparing a business plan and setting up her business.
Clarissa decides to establish a limited liability company and names her friend Tuure as a deputy member of the Board of Directors. Clarissa buys accounting services from an accounting firm. The catering business also needs facilities to cook food and store serving and transport equipment. Clarissa addresses the requirements set by food hygiene and later submits the necessary notifications to the Finnish Food Authority.
Clarissa establishes her company online (ytj.fi) and also enters it in the Finnish Tax Administration’s VAT register. Once the company has been established, Clarissa takes out YEL insurance to take care of her pension cover. She needs to make tax prepayments based on her company’s estimated profit. For the tax prepayments, Clarissa estimates her company’s income and expenses. Expenses include facility rent, new tableware and her wages.
- Contact your local Enterprise Agency for help in setting up your business.
- Enter your company in the Trade Register, prepayment register and VAT register (ytj.fi).
- Decide how to maintain your company’s accounting records. You can maintain the records yourself or buy accounting services from an accounting firm.
- If you decide to use an accounting firm, authorise your accountant to submit data on your behalf using the Suomi.fi authorisation. Instructions for granting the Suomi.fi authorisation.
- Take care of your pension cover by taking out YEL insurance.
- Visit the Finnish Food Authority’s website to check everything you need to know about a food company’s facilities and supervision.