Financial difficulties - Finland
If a company falls or has fallen into financial difficulties, it is worth applying for aid as early on as possible.
A debtor who is unable to pay his debts may be placed in bankruptcy as stipulated by the Bankruptcy Act.
The imposition of bankruptcy is decided by a court, at the request of the debtor or creditor.
The administration of bankrupt estates is monitored by the bankruptcy ombudsman.
Stabilising a business
When a company gets into financial difficulties, the situation affects a large interest group. However, by reorganising the company and avoiding bankruptcy, the interest groups stand to benefit.
Pre-emptive reorganisation of a company is an effective one-off process, where the company avoids bankruptcy, clears its financial difficulties, and is able to continue its operations profitably and competitively.
As a result of collaboration between Finnvera, TMA Finland ry and their associates, TMA (Turnaround Management) has been developed to target businesses in financial difficulty, in order to develop their business, and with a view to change management and regeneration.
Access to different sources of finance can help overcome financial difficulties.
When filing for bankruptcy is the only option left for a business owner, it pays to cut your losses, initiate proceedings sooner rather than later, and move on to a new project.
Deferment of payment
If the business's solvency has deteriorated, the entrepreneur will ask his suppliers/customers for a payment period.
For example, it is worth contacting the Tax Administration as early on as possible. It may be possible to gain some flexibility with the payment schedule for taxes and, for example, employee pension contributions.
The aim of reorganisation is for a debtor in financial difficulties to reorganise his viable business activities, or to ensure the requirements exist for this, and to ensure that the debt is reorganised.
The employer's social security payments are listed on the Tax Administration website.
Other statutory payments include employee pension insurance, accident insurance, withheld tax and social security payments that are sent to the tax office.
Pay security protects employees from having their earnings from the employment relationship paid towards the employer's bankruptcy or other insolvency. Any receivables paid as pay security, and their interest, are collected from the employer or his bankrupt estate, and repaid to the State.
The EnterpriseFinland section on reorganisation includes the organisation of tax payments and reorganisation of businesses.
The Reorganisation Society offers advice on reorganisation.
Finnvera offers financial solutions for different corporate circumstances.
A debtor in financial difficulties may apply for reorganisation.
Check also the legislation on this topic in: