Knowing and implementing commercial law legislations is the heart of our day to day activity. When communicating with the Commercial Register and the Non-Profit Associations and Foundations Register, Register of Economic Activities or the Estonian Customs and Tax Board, it is important to observe the requirements established with different legislations to ensure a quick and proper result.
Founding a private limited company
There are two ways to found a private limited company – simplified procedure with a notarised memorandum of association or an expedited procedure through the e-Business Register.
In the course of the simplified procedure, founders first sign a memorandum of association at the notary’s office. After that, contributions are generally made into the share capital, state levy is paid and the notary will then submit documents to the Commercial Register. The Commercial Register enters the company in the register within 5 working days at the latest.
For the expedited procedure, the company has to be founded through the e-Business Register. All founders must be able to provide digital signatures in order to enter the system, identify the persons, sign all documents digitally and submit them to the Commercial Register. The company is entered in the register within 1 working day. In this case, contributions to the share capital may only be monetary or the foundation will take place without making contributions. Share capital is transferred to the deposit account or electronic starter account of the Commercial Register through an online bank.
Private limited company can also be founded without making contributions, i.e. making a contribution is postponed. Private limited company founded without a contribution cannot pay out dividends or increase its share capital until a contribution has been made to the share capital.
Founding a non-profit association
A non-profit association must have at least two members. The number of members of the board is determined with the articles of association. Principal activity of a non-profit association may not be economic activities. A non-profit association may not divide its profit among its members. A non-profit association may only use its profit for achieving its objectives arising from the articles of association.
A non-profit association is founded by entering into a memorandum of association that establishes the objectives and articles of association of the non-profit association and appoints members of the management board. Memorandum of association is an unattested written document that does not require a notary’s certification. Entry application is submitted either digitally or with a notary’s certification.
The service for founding a non-profit association includes consultations and the preparation and submission of all the necessary documents.
Founding a foundation
Foundation is a legal entity established for administration and exploitation of property in order to achieve the objectives arising from the articles of association. A foundation does not have any members. The principal managing body of a foundation is a council appointed on the grounds established with the articles of association. A foundation must have an auditor.
A foundation is founded by entering into a notarised foundation resolution or memorandum of association that confirms the objectives and articles of association of the foundation, appoints a council and members of the board and an auditor.
The service of founding a foundation includes consultations and the preparation and submission of all the necessary documents.