Structure of a Finnish SPV

Like in other jurisdictions, individual projects in Finland are commonly organized in the framework of a Single Purpose Vehicle (SPV). In Finland, the vehicle comes – almost without exception – in the legal form of a limited company (osakeyhtiö, Oy).

The Oy is an independent legal entity that is “bankruptcy remote”, i.e., the insolvency of the SPV does not put the parent company at risk in excess of the loss of any equity or debt investments already made. Further, the assets held by the SPV are as such unaffected by the insolvency of the parent company and can thus serve as collateral for non-recourse financing or other financing instruments.

A private limited company can be established with an arbitrary amount of registered share capital or also, if the founders so decide, without any protected share capital.

The articles of association contain the fundamental rules for the company’s structure and management. The law leaves the founders considerable latitude in moulding the articles according to their needs. For the case that the SPV is in the hands of more than one shareholder, the articles may contain detailed individual provisions, e.g., with regard to voting rights, distribution of profits, pre-emption rights, or formalities in respect of shareholders’ meetings.

The central managing organ of the company is the board of directors (hallitus), consisting of one or more members. If fewer than three regular members of the board are nominated, one substitute member must also be appointed.

Board members do not necessarily have to work in the company on a continuous basis. The board is, however, the organ ultimately responsible for the management of the company. It has responsibility for supervising the managing director and giving the managing director instructions as to how to fulfil his or her duties.

In addition to the board, the company may appoint a managing director (toimitusjohtaja). In practice, the majority of Finnish companies have a managing director. If a managing director has been appointed, he or she runs the day-to-day business of the company. The managing director is also responsible for ensuring proper accounting. The authority of the managing director is limited to the usual course of business, insofar as the articles of association do not provide otherwise.