Elävillä on sielu, mutta kuolleilla ei.

From Lesson 359:Participles as nouns·Finnish

Questions & Answers about Elävillä on sielu, mutta kuolleilla ei.

How are the words elävillä and kuolleilla formed here?
Both are participles acting directly as nouns in the adessive case (-lla/-llä) to express possession. Elävillä is the plural adessive of elävä (living), the present active participle of elää. Kuolleilla is the plural adessive of kuollut (dead), the past active participle of kuolla.
Why does the stem for kuollut change to kuollei- in this sentence?
Because it is a past active participle (the NUT participle). Words ending in -lut change their stem to -lee- in the singular, and -lei- in the plural. So, the plural stem of kuollut is kuollei-, to which the adessive ending -lla is attached.
Why is the Finnish word sielu (soul) in the singular when the English translation says "souls"?
Finnish prefers the singular in possessive sentences when multiple people each possess exactly one of the item. Since each living person has one soul, Finnish uses the singular sielu, whereas English usually matches the plural subject by saying "souls".
Why does the sentence end with just ei instead of ei ole?
In a contrastive sentence, you can drop the main verb (ole) in the second half to avoid repetition. The negative verb ei alone is enough to convey "do not have", similar to how English drops "have" and just says "do not".

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