Finnish company law stipulates that decisions of the shareholders’ meeting be made by simple majority. For any decision to be approved, it suffices that more than 50% of the votes cast are in favour of the proposal. If the votes are even in cases of elections, the matter is decided by lot; in any other decisions, the vote of the chair of the meeting is decisive.

The use of qualified majorities is mandatory for a number of special matters. This means that a corresponding minority has the possibility to prevent these decisions from being made. The law allows the articles of association to establish stricter (but not more lenient) majority requirements. Therefore, the minority rights provided by law are minimum rights.

However, the degree of influence a minority shareholder may exert can be regulated using individual provisions on voting rights. The articles of association may provide for the allotment of different types of shares carrying varying numbers of votes. It is also possible to render specific shares entirely non-voting, either in general or for specific types of resolutions.

Such provisions on voting rights cannot be introduced against the will of the shareholder. In order to create new types of shares, one must obtain consent from all shareholders whose rights are affected. Therefore, appropriate provisions should be included in the articles before any shares are transferred to a possible joint venture partner or other minority shareholder.

In order to be able to assess a specific minority shareholder’s rights accurately, it is necessary to take into account legal provisions, the articles of association, and any shareholder agreements that the shareholders may have concluded amongst themselves. When negotiating the terms of a sale of shares or preparing the establishment of a company, it is advisable to make use of the possibilities that these instruments provide.

Each shareholder has the right to participate in shareholders’ meetings, to give his or her opinion on matters on the agenda, and to address questions to the members of the organs of the company. Regardless of the number of shares held by the individual shareholder, he or she has the right to demand that a specific issue is discussed at the shareholders’ meeting, provided that this request is made in writing early enough that the issue can be included in the invitation to the shareholders’ meeting.

The consent of all affected shareholders is required (in addition to the normal qualified majority for changes in the articles) to any changes to the articles of association that restrict the economic rights granted by shares that have already been issued, or decisions that impose additional obligations on the holders of such shares. A decision to reduce the rights of specific shares to participate in the distribution of profits is an example of this.

One or more shareholders who (together) hold at least 10% of all shares in the company may demand that a shareholders’ meeting be convened within two weeks in order to discuss a specific matter. This right is independent from the voting rights granted by the shares held by these shareholders.

When deciding on the distribution of profits, the same minority has the right to demand that at least half the profits of the financial year – after deduction of mandatory reserves required by the articles – be distributed to the shareholders. The amount that must be distributed is, however, limited to 8% of the company’s own capital. It is possible to exclude this right in the articles of association. However, this is possible only with the consent of all shareholders. Therefore, the inclusion of such a provision in the articles should be considered before minority shares are transferred to a partner.

Resolutions aiming at changes in the articles of association or in the corporate status of the company require a majority of

This means that, with regard to changes in the articles or status changes such as mergers, splits, or liquidation, even shares with limited voting rights are granted full influence on the decisions in question. However, shares that bestow no voting rights according to the articles are not taken into account when assessing the qualified majority.

Certain changes in company structure additionally require a two-thirds majority of the represented shares of each share type individually, provided that there is more than one type of shares in the company.

If the change to the articles of association at issue changes the rights attached to a specific type of shares or, if two types of shares are merged, the consent of the majority of all shares of that type (including those not represented at the meeting) is also required.

The simplest way to arrange the voting rights of shares in relation to each other is to create share types which have differing voting rights attached to them. Such arrangement can be used in order to grant shareholders with increased voting rights the possibility to control the main aspects of the company’s business policies and to appoint the members of the board even if their share in the company’s capital is small.

However, such an arrangement is ineffective insofar as the law requires qualified majorities for certain types of decisions; for example, changes to the articles of association or to the structure of the company. In these cases, a qualified majority is required also with regard to the absolute amount of shares represented at the shareholders’ meeting. If the majority shareholder wishes to secure a majority sufficient for resolutions in these matters, it is possible to use non-voting shares. These are not counted when determining the shares represented at the meeting. A minority shareholder could, for example, own a number of non-voting as well as voting shares, so that he or she need not be excluded from voting completely.

In any case in which there is more than one shareholder, it is advisable to consider carefully whether there is a need for provisions promoting the rights of minorities or securing the interests of the majority shareholder. Sometimes legal provisions do not suffice in order to achieve the desired results, in which case individual articles and shareholder agreements should be drafted. Review of the relevant issues and possible arrangements to be made in respect of them should be carried out in good time before engaging in any share transactions.