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Private trader – Banking services for your company’s needs

OP also offers a private trader all banking services for the various stages of business operations.

What is a private trader?

A private trader is a company form in which the business is run by a natural person, who is also called a private trader. A private trader is personally liable for the business's debts and agreements, meaning they may even have to use personal assets to pay off debts, if necessary.

If starting up and running your business requires a loan and large investments in machinery and equipment, for example, a private trader is not necessarily the best company form for your business. It's an excellent company form for sole entrepreneurs, new entrepreneurs and small-scale businesses. Examples of typical private traders include massage therapists, therapists and hairdressers, and the company form also suits businesses selling the entrepreneur's own expertise. A private trader can sometimes also be called a sole trader or self-employed worker.

Managing finances is usually simple. In most cases, single-entry bookkeeping is sufficient for a private trader, as opposed to limited liability companies, which are required to use double-entry bookkeeping. Earnings are calculated by subtracting expenses for the production of income from taxable income. A private trader does not pay themself a salary but draws their income from the company's account as cash withdrawals for private use. All money belonging to the business is considered the entrepreneur's personal income. Earnings are taxed as the private trader's earned income or capital income. 

How to set up as a private trader

You can set up as a private trader easily, inexpensively and quickly by submitting an electric start-up notification to the Business Information System (YTJ) administered jointly by the Finnish Patent and Registration Office and Finnish Tax Administration. You can also register an auxiliary company name or a parallel company name either when setting up your business or at a later stage.

A private trader may engage in a certain area of business under an auxiliary company name. The auxiliary company name is more descriptive of that particular area of business. For example, a private trader who is a massage therapist is also a photographer and uses a better fitting auxiliary company name for that part of their business. Taxation and accounting of the auxiliary business are handled together with the actual business.

A parallel company name is the business's company name in another language. A parallel company name can make it easier to run and market a business abroad. Prior to registering it, a parallel company name must pass the Finnish Patent and Registration Office's name examination.

Read more about becoming a private trader

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Banking and insurance services for private traders

We can offer private traders all the banking and insurance services that you need. You can, for example, open a bank account as a private trader and activate our online and mobile service easily online. In our digital services, you can pay your company’s bills and send invoices to your customers. 

We will also provide you with a suitable insurance solution. As a private trader, your risks depend on what your business is like. 

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Request an offer for insurance for private traders

 

Taxation of private traders 

Entrepreneurs pay prepayment taxes for their earnings. As a private trader, you pay income tax based on your estimated earnings. A private trader files a tax return annually both personally and as a private trader.

Learn more about the taxation of private traders