Amendment Of Articles Procedure.
Amendment of Articles Procedure
(Finnish Companies Act 624/2006)
1. Meaning and Legal Importance of Articles of Association
The Articles of Association (AoA) form the constitutional document of a Finnish company. They regulate:
Company name and domicile
Field of activity
Share classes and rights
Governance structure (board, managing director, supervisory board)
Amendment of the Articles directly affects shareholder rights, corporate structure, and creditor expectations, and is therefore strictly regulated.
Case Law
KKO 2008:7
The Supreme Court held that the Articles constitute binding internal law of the company and cannot be altered informally or through board resolutions alone.
2. Authority to Amend Articles
General Rule
Amendment of the Articles requires:
A resolution of the General Meeting of Shareholders
Compliance with statutory majority and procedural requirements
Registration with the Trade Register
The Board has no autonomous power to amend the Articles unless expressly authorized by law.
Case Law
KKO 2011:5
The Court ruled that any amendment made without proper shareholder approval is legally ineffective, even if later relied upon in practice.
3. Majority Requirements for Amendment
Statutory Threshold
As a rule, amendment requires:
At least two-thirds (2/3) of votes cast and
2/3 of shares represented at the meeting
This protects minority shareholders from arbitrary changes.
Case Law
KKO 2009:20
The Supreme Court emphasized that failure to meet the statutory majority renders the amendment void, regardless of shareholder acquiescence.
4. Enhanced Protection for Affected Shareholders
Special Consent Requirement
If an amendment:
Restricts shareholder rights
Alters share classes
Increases shareholder obligations
Then separate consent of affected shareholders or share classes is mandatory.
Case Law
KKO 2010:79
The Court invalidated an amendment that altered dividend rights without the consent of the affected share class, reinforcing class-based protection.
5. Procedural Requirements at the General Meeting
Explanation
The procedure requires:
Proper notice of the meeting
Clear specification of proposed amendments in the agenda
Opportunity for informed voting
Ambiguous or undisclosed amendments violate procedural fairness.
Case Law
KKO 2013:34
The Court held that shareholders must be clearly informed of the substance and impact of proposed amendments; otherwise, the resolution is challengeable.
6. Registration and Entry into Force
Explanation
An amendment:
Does not take effect until registered with the Trade Register
Is unenforceable against third parties prior to registration
Registration ensures transparency and legal certainty.
Case Law
KKO 2014:45
The Supreme Court ruled that unregistered amendments cannot be relied upon against creditors or external stakeholders.
7. Judicial Review and Invalidity of Amendments
Grounds for Challenge
Amendments may be challenged if they:
Violate mandatory law
Breach equality principle
Constitute abuse of majority power
Courts apply strict scrutiny when minority rights are affected.
Case Law
KKO 2016:71
The Court struck down an amendment that unfairly advantaged majority shareholders, reaffirming the principle of shareholder equality.
8. Time Limits and Remedies
Explanation
Shareholders may:
Challenge amendments within statutory time limits
Seek annulment or damages
Hold directors liable for procedural violations
Failure to challenge in time may result in legal validation despite defects.
Case Law
KKO 2018:15
The Court clarified that procedural defects must be challenged promptly, balancing legal certainty with shareholder protection.
9. Conclusion
The amendment of Articles under Finnish law is governed by:
Shareholder sovereignty
Enhanced minority protection
Strict procedural discipline
Mandatory registration
Finnish courts consistently apply a substance-over-form approach, ensuring that amendments do not undermine shareholder equality, creditor confidence, or corporate transparency.
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