Visit fondia.com

primary_areas

    The content concerns Finnish legislation.
     

    Loans and Guarantees to Affiliates

    The Companies Act does not include any specific limitations regarding monetary loans granted to a company’s affiliates [Related Parties of a Company]⁠. When granting a loan to an affiliate, it is important to ensure that the principle of equal treatment of shareholders or the rights of the company’s creditors are not violated, and that the loan otherwise fulfills the requirements set forth for distribution of assets [Use and Distribution of a Company Assets in General]⁠. As regards granting of a loan, other assets or issuing of guarantees for the purpose of acquiring shares in the company or its parent company, see Prohibition on Financing Acquisition of Shares in the Company [Prohibition on Financing Acquisition of Shares in the Company]⁠.⁠

    The basic principle assumed in the preparatory materials of the Companies Act is that substantial loans granted to affiliated parties are only rarely in the interests of the company or its operations. Subject to the aforementioned restrictions, however, such loans are not automatically prohibited.

    Loans, liabilities and commitments to affiliated parties, as well as the main terms thereof, must be separately noted in the annual report of the company, if the aggregate amount thereof exceeds 20,000 euro, or five per cent of the balance of the company’s equity according to its balance sheet.

    We law your business.

    Privacy⁠Privacy⁠
    Cookies⁠Cookies⁠
    Terms of Use⁠Terms of Use⁠
    Contact us⁠Contact us⁠

    Copyright © Fondia 2022. All rights reserved.