As with so many other things, there are two sides to the formal requirements of law. The written form or the requirement of the cooperation of public offices certainly provides better evidence and thus a higher legal security in general. Besides this, the notarial form makes it possible to inform parties about the legal consequences and, last but not least, protects against hasty decisions in important matters. On the other side though, the formal requirements in connection with the conclusion of agreements usually lead to delays and additional costs, which in many cases are not objectively justified.

In this highlighted discrepancy the point of departure of both Finnish and German law is the principle that legal transactions may always be agreed on informally. Thus binding agreements can also be concluded verbally, in the absence of any contrary specific legal form requirement.

Formal requirements may also be agreed on by the parties. If, however, there are legally mandated formal requirements for a particular transaction, that transaction cannot effectively be concluded if these formal requirements have not been met, whereas the lack of a form based on agreement would usually only have consequences in the burden of proof.

German and Finnish law do not have much more in common with respect to formal requirements. In areas relevant for trade and industry, Finnish law requires the observance of the formal requirements of the law only in a few exceptional cases, and in such cases a written form is usually sufficient.

Thus the uncomplicated realisation of transactions at low cost is considered a priority whereas legal certainty and protection against haste have a secondary value. The German approach tends towards an opposite evaluation. Thus it will come as no surprise that legal formal requirements are not only more common under German law, but in many cases are also far more strict than corresponding regulations in Finland. Just as in other areas of life, the conspicuous differences between German and Finnish mentality also manifest themselves through the different legal systems.

The transfer of real estates is the classic case of a transaction requiring a certain form. Here German law requires the authentication of the contract by a notary, whereas in Finland such agreements may be concluded in a simple written form. The agreement need only be confirmed by a public registrar. In many cases, however, real estates are owned by housing corporations. The function of the shares of these corporations corresponds to that of German flat property. The transfer of the shares of these corporations can, with some exceptions for reasons of consumer protection, usually be made informally.

If a public registrar takes action in connection with the transfer of real estates, he has the function of a US-American public notary rather than that of a German notary, which can also be seen through, at least compared to the fees of the German notaries, corresponding lower costs. The official recording of a contract, including the reading of the document aloud and signatures of both parties in the presence of a notary, is unknown in Finnish law.

In Finland authorisations must bear the signatures of two witnesses. In a particular case this can mean more or less formal requirements compared with corresponding German provisions. Certainly, on the basis of the provisions of Finnish international civil law, the German form should be sufficient for an authorisation issued in Germany, but as this is not known everywhere it is reasonable to meet this requirement. For general powers of attorney, however, a simple written form is also sufficient in Finland.

It is also possible to found a limited company in simple written form according to Finnish law. The founders must issue and sign the foundation charter, enclose the articles of association and apply for entry on the commercial register. For the transfer of company shares in private limited companies (the corresponding company form of which in Germany is the GmbH) even a verbal agreement is binding. In practise, of course, usually a written form is chosen and in any case this is required in connection with the share register as well as for the payment of the transfer tax.

As the above points make clear, Finnish entrepreneurs do not need to fly to Switzerland from time to time in order to transfer company shares like their German colleagues. It can, however, happen that, lacking advice, they sometimes conclude void private written agreements on the sale of shares of a German subsidiary. Occasionally a buyer may remain unaware of questions on liability or other notable aspects.

This is where the dark side of the ostensibly easier formal requirements arises. This lack of strict formal requirements can mislead one to believe that the transactions in question can easily be managed by anybody. However, this can have expensive consequences.

E. g., if, through the lack of advice, an application for entry on the commercial register is made incorrectly, the registration and thereby the creation of the company can be considerably delayed. This can lead to a personal liability on behalf of the founders for any transactions concluded.

German partners in particular have a general lack of information on the Finnish market, which, in respect of questions of company law, cannot be avoided by merely agreeing on German law. Unlike e. g. delivery contracts, Finnish law is imperative on questions with respect to company law, as with e. g. the nomination of company organs, questions of liability etc..

Thus it is highly advisable that, even if this is not strictly imperative by law, necessary advice should be taken in one's own interest. As there are no notaries in Finland as in Germany, the corresponding services, e.g. as with assistance with the issuance of documents in accordance with company law, applications to the commercial register, as well as the realisation of transactions through trust accounts, are all provided by attorneys at law.