The amendments to the Finnish Companies Act (see International Financial Law Review, August 1996, page 56) and certain related legislation were ratified in February 1997 and due to come into effect on September 1 1997.
Among other provisions, the new legislation introduces a division of companies into private limited liability companies and public limited liability companies.
In addition, new financial instruments — subscription warrants, subordinated loans and preference shares — are introduced. Also, the increased possibilities for companies to trade in their own shares will add to the means of financing available.
To give Finnish limited liability companies and their shareholders time to adapt to the amended legislation, several transitional periods are provided. However, the new provisions on public limited liability companies will, as of September 1 1997, apply to issuers of securities subject to public trade. Such companies will have to amend their articles of association to comply with the new provisions within one year of their entry into force, failing which public trading in the company's securities will have to be terminated.