Legal forms of Estonian company

ITS_logo_35x35   Private Limited Company (Osaühing) – OÜ, Ltd.

A private limited company is a company that has its share capital divided into private limited company shares. A shareholder is not 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. This is most popular legal form used in Estonia.

The share capital must be a minimum of EUR 2,500. The minimum nominal value of a share is EUR 1. If the founders are private persons and the share capital is less than EUR 25,000 then the founders can decide that the contribution must not be paid upon the establishing of the company. Until the whole sum has been paid, the founders are personally liable for the obligations of the company within the amount of the missing contribution.

A private limited company must have a management board. The management board is a directing body of the private limited company that represents and directs the private limited company. The management board may have one member (director) or several members. A member of the management board need not be a shareholder. A member of the management board must be a natural person with active legal capacity.

The shareholder and/or board member can be foreign resident with no other obligations or restrictions than local residents. If more than half of board members are not residing in Estonia then the company must give the Commercial Register a contact in Estonia where necessary documents can be sent. The foreign owner must give the Commercial Register his/her address and e-mail address.

A private limited company can have a supervisor board if prescribed by the Articles of Association. But it is not mandatory by the law. A private limited company must have an auditor if prescribed by law or the Articles of Association. An auditor is also mandatory when the company surpasses certain threshold values in terms of turnover, number of employees and asset value.

From 01.01.2011 a private limited company can be established without contributing the share capital if the proposed area of activity does not require capital investments. The share capital of such a company will be formed by the liabilities of the founders amounting to the sum they promised to provide as share capital contribution


ITS_logo_35x35   Public Limited Company (Aktsiaselts) – AS, PLC.

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 with or without share subscription may found a public limited company.

Share capital must be a minimum of EUR 25,000 and the minimum nominal value of a share should be EUR 0,1. Shares must be registered and 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.

A public limited company must have a management board and a supervisory board.

The management board is a directing body of the public limited company that represents and directs the public limited company. A member of the management board need not be a shareholder. The management board may have one member (director) or several members. A member of the management board must be a natural person with active legal capacity. A member of the supervisory board must not be a member of the management board.

The shareholder and/or board member can be foreign resident with no other obligations or restrictions than local residents. If more than half of board members are not residing in Estonia then the company must give the Commercial Register a contact in Estonia where necessary documents can be sent. The foreign owner must give the Commercial Register his/her address and e-mail address.

The supervisory board must plan the activities of the public limited company, organize the management of the public limited company and supervise the activities of the management board. The supervisory board must notify the general meeting of the results of a review. The supervisory board must give orders to the management board for organization of the management of the public limited company. The supervisory board must have three members unless the Articles of Association prescribe a greater number of members. A member of the supervisory board must be a natural person with active legal capacity.

A public limited company must appoint an auditor.

ITS_logo_35x35   General Partnership (Täisühing) – TÜ

A general partnership is a commercial undertaking in which two or more partners operate under a common business name and are solidarily liable for the obligations of the partnership with all of their assets. A general partnership must operate on the basis of the partnership agreement concluded by the partners. There is no minimum capital requirement and partners make monetary or non-monetary contributions in the amount prescribed by the partnership agreement.


ITS_logo_35x35   Limited Partnership (Usaldusühing) – UÜ

A limited partnership is a company in which two or more persons operate under a common business name, and at least one of the persons (general partner) is liable for the obligations of the limited partnership with all of the general partner’s assets. At least one of the persons (limited partner) is liable for the obligations of the limited partnership to the extent of the limited partner’s contribution.

A limited partner does not have the right to manage or represent the limited partnership unless the partnership agreement prescribes otherwise. A limited partner who has paid a contribution in full is not liable for the obligations of the limited partnership and he or she is entitled to the corresponding part of its profits.


ITS_logo_35x35   Sole Proprietorship (Füüsilisest Isikust Ettevõtja) – FIE

A sole proprietor must be entered in the Commercial Register on his or her petition, or on another basis provided by law. A sole proprietor is liable for his or her obligations with all of his or her assets.

ITS_logo_35x35   Branch of Foreign Company

If a foreign commercial undertaking wants to permanently offer goods or services in its own name in Estonia, it should enter its branch in the Commercial Register. A branch is not a legal person. The company is liable for the obligations arising from the activities of the branch. In the cases provided by law, a company must obtain a licence in order to found a branch in Estonia.

A foreign company must appoint a director or directors for the branch. A director must be a natural person with active legal capacity. The residence of at least one director must be in Estonia, in a member state of EEA or in Swiss Confederation. If several directors are appointed for a branch, each of them may represent the branch unless it is specified that the directors or some of them may represent the branch jointly.

A foreign company must maintain separate accounts concerning the branch. Accounts concerning the branch must be maintained pursuant to the requirements of the Accounting Act.