INCORPORATION OF COMPANY IN ESTONIA
The new Commercial Code was adopted on 15 February 1995 and has been effective since 1 September 1995. The law expresses the basic principles of Estonian entrepreneurship according to the best European traditions and standards and outlines the role of the Commercial Register. As per the code there may be a private or a public limited company.
PRIVATE LIMITED COMPANY (osaÃ¼hing or OÃœ)
A private limited company is a company that has share capital divided into private limited company shares. A shareholder will not be personally liable for the obligations of the company. A private limited company is liable for the performance of its obligations with all of its assets.
The share capital must be a minimum of 40,000 EEK (approx. EUR 2,556). The minimum nominal value of a share is 100 EEK. A shareholder may freely transfer a share to another shareholder.
Upon transfer of a share to a third person, the other shareholders have the right of pre-emption. A share of a private limited company can be pledged or encumbered or divided or transferred to successor if not fixed otherwise in the Articles of Association. The shareholder is required to make a contribution corresponding to the nominal value of the shareholders share.
PUBLIC LIMITED COMPANY (aktsiaselts or AS)
A public limited company is a company that has a share capital divided into public limited company shares. A shareholder is not personally liable for the obligations of the public limited company. A public limited company is liable for the performance of its obligations with all of its assets. One or more natural or legal persons without or with share subscription may found a public limited company.
Share capital must be a minimum of EEK 400,000 (approx. EUR 25,560) and the minimum nominal value of a share should be EEK 10. Shares shall be registered. Shares shall be entered in the Estonian Central Register of Securities. The rights attached to registered shares belong to the person who is entered as the shareholder in the share register maintained by the company.
The management board shall ensure the timely submission of correct information. The number of shares a shareholder can own in a company is unlimited and shares can be freely transferred to third parties.
For entering a company in the Commercial Register, the founders must draft a Memorandum of Association, the founders shall also apply an Articles of Association as an annex to Memorandum of Association.
The Memorandum of Association must be signed by all founding members and notarised in Estonia or at the Estonian diplomatic representation in a foreign country. Upon foundation, the founders shall open a bank account in the name of the newly founded company into which monetary contributions will be paid in.
The required minimum share capital requirement must be paid in before the registration of the company. Contributions may be monetary or non-monetary, but not in the means of service or work provided for the company or any activities of the founders at the foundation of the company.
The Memorandum of Association must include the following information:
- the business name, location, address and area of activity of the company;
- the names and residences or seats of the founders;
- the proposed amount of share capital;
- the nominal value and number of shares and, upon of issue of more than one class of shares, their denotation and the rights attaching to the shares and their division among the founders;
- the amount to be paid for the shares, and the time, place and procedure of payment;
- if a share is paid for by a non-monetary contribution, the item of the non-monetary contribution, its valuation method and value;
- the names, personal identification codes and places of residence of members of the management board, supervisory board, procurator (if appointed) and auditors;
the assumed amount of foundation expenses and the procedure for payment thereof.
The Management Board must submit a petition application for the registration in the Commercial Register within six months of concluding the Foundation Agreement. The application must be signed by all members of the board and include the following information to be entered to the Commercial Register:
- the business name of the public limited company;
- the area of activity, location and address of the public limited company;
- the amount of share capital;
- the date of approval of the Articles of Association;
- the names, personal identification codes and residences of the management board;
- the members of the management board entitled to represent the public limited company differently than provided for in subsection 307(1) of the Commercial Code;
- the beginning and end of the financial year;
other information provided by law.
The following documents should be enclosed with the application:
- the memorandum of association;
- the articles of association;
- a bank notice concerning the payment of share capital;
- upon payment by a non-monetary contribution, the agreement concerning the transfer of the contribution to the public limited company, documents certifying the value of the contribution and an opinion on the valuation of the non-monetary contribution signed by the audito
- the names, personal identification codes and residences of the members of the managing board, the supervisory board, and the auditors;
- specimen signatures of the members of the managing board;
- telecommunication numbers (telephone, fax, etc.);
- a notice from the registrar of the Estonian Central register of Securities concerning registration of the shares;
other documents provided by law.
MINIMUM CAPITAL REQUIRED AND FEES FOR INCORPORATION
Private/Public Limited Company shall require a 0.2% of (nominal) share capital (min. EEK 3,000 max. EEK 20,000 (approx. EUR 1,278) for private limited company; and min. EEK 4,000 (EUR 255.6) max EEK 40,000 (approx. EUR 2,556) for public limited.
In case the subscribed funding capital is EEK 40,000, the fee will be EEK 3,000 (192 EUR), notarial fee EEK 330 (EUR 21) and signature confirmation/notarial witness fee EEK 10 (EUR 0.64).