Business ID and sole trader: what a small business owner needs to know

Before you can sell a service you need a business and a business ID (Y-tunnus). This text is a general introduction, not tax advice or legal advice. Current guidance is available from the authorities: ytj.fi, prh.fi and vero.fi.

The business ID in brief

The business ID identifies a company. It consists of seven digits, a hyphen and a check digit (for example 1234567-8). You get it when you submit a start-up notification. With the number a customer can check the company's details.

The most common business forms

• Sole trader (toiminimi): the entrepreneur operates under their own name. Setting up is light, but the entrepreneur is personally liable for the business's debts.
• Limited company (osakeyhtiö): the company is a legal person of its own. Setting up requires more, and the entrepreneur's personal liability is usually more limited. Bookkeeping and administration are more demanding.
• Other forms: for example a limited partnership, a general partnership and a cooperative.

The right form depends on the scale of the business, the risks and future plans. If you are unsure, ask a bookkeeper or the New Business Centre (Uusyrityskeskus).

What else is good to find out

• Value-added tax: when is the business liable for VAT?
• Prepayment register: you need it if a customer wants the household tax credit.
• Insurance: liability insurance is sensible in many jobs, sometimes necessary.
• Permits and qualifications: some jobs, such as electrical work, require authorisation.
• Bookkeeping: an accounting firm or software makes daily life easier.

On Palvelunyt.fi

You apply as a provider with a business ID. An administrator reviews the application, and after approval you see the requests in your area and can send quotes.

Where to find information

• Business Information System: ytj.fi
• Finnish Patent and Registration Office: prh.fi
• Finnish Tax Administration: vero.fi
• New Business Centre: uusyrityskeskus.fi