What is a limited partnership in Estonia?
A limited partnership in Estonia is a type of company in which two or more persons operate under a common business name. At least one person (the general partner) is responsible for the company's obligations with all his assets and the other person (the limited partner) only with his contribution in the company's capital. This type of company is regulated by the Estonian Commercial Code and by the applicable requirements relating to limited partnerships.
The company's members
The general partner of limited partnership in Estonia may be a natural person or a legal entity and a new partner may be adopted only with the consent of all the shareholders. A limited partner has no right to manage the company, but, according to the Articles of Association, he may participate and involve in the company's general meetings and in decision-making.
The limited partnership in Estonia operates under the shareholders' agreement (articles of association), which does not need to be concluded in front of a notary, but a notarized copy is required in the incorporation procedure when registering the company.
The incorporation procedure of a limited partnership in Estonia
As mentioned before, the shareholders of a limited partnership in Estonia must draw up the articles of association, which must be notarized in order to register the company with the Estonian Commercial Register.
The shareholders must choose an unique name for the business, which must also contain at the beginning or end of the words "limited partnership" or the abbreviation “ÛÛ”.
The partners' contribution in the company's capital shall be determined by the partnership agreement and it may be monetary or non-monetary and the Estonian law does not provide a mandatory minimum share capital.
A limited partnership in Estonia can be registered via an online procedure, where the partners need to digitally sign the electronic recording of technical means (ID card and specific identity information). When the company meets the following minimum requirements of registration, the online registration can be accomplished in a short period of time: the company's shareholders have registered residence in Estonia; founders and other individuals associated with the company have an Estonian ID card and they can provide digital signatures; the share capital is deposited in cash.
The founders may also set up the limited partnership in Estonia in front of a notary, procedure that runs quick and when the compliance of the documentation comes in charge of the notary. However, this form of incorporation requires the payment of notary fees.
Incorporation costs and other registrations
The state fees for incorporating a limited partnership in Estonia are about EUR 12,78 and the application fee for digital signature is 12,75 EUR. Moreover, the articles of association drawn up by a notary and the notary fees (in case of notary incorporation) represent extra-costs.
Depending on the type of activity, the company must achieve certain licenses, must be registered with the Register of Economic Activities, and, in case of an annual turnover exceeding EUR 16,000, the company must be registered with the Tax and Customs Board for VAT purposes. When the company becomes an employer, it must be registered for Health Insurance Fund and the Labor Inspectorate must also be informed.
Contact our company formation specialists in Estonia for further information about the limited partnership in this country and for any issue related to the establishment o a company. We can provide customized legal support.