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Types of Estonian Companies

Updated on Tuesday 20th October 2015

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Estonian companies

 
The types of companies in Estonia are described in the Company Act, the main legislative document that regulates company formation in the country.
 
According to law, the following types of legal entities can be incorporated in Estonia:
 
- the general partnership;
- the limited partnership;
- the private limited company;
- the public limited company;
- the commercial association;
- sole proprietorship.
 
Foreign investors who set up companies in Estonia should be informed about all the types of structures and their particularities. Only by knowing the differences between companies, can investors choose the most suited one for their business. Furthermore, if you need assistance during the company registration procedure in Estonia, our experts can help you.
 

Limited companies in Estonia 

 
The private limited company and the public limited company are the most popular business forms in Estonia. An important difference between the two lies in the minimum share capital needed to incorporate the company. While the private limited liability company is more suited for small and medium sized businesses, the public limited company is usually chosen by large corporations in Estonia. 
 
The private limited company is not able to sell its shares to the public – this is the main characteristic that differentiates it from the public one. A minimum share capital of 2,500 EUR is needed to incorporate this company. Shareholders are liable to the extent of their contribution to the capital of the company. A private limited company must have a management board but a supervisory board is optional (mandatory only if prescribed for in the Articles of Association).
 
The public limited company has larger incorporation costs but its shares are freely transferable and it can be listed on the Estonian Stock Exchange. The minimum share capital for this company is 25,000 EUR. A management board and a supervisory board are directing and supervising the actions of a public limited company. This type of company must observe the accounting requirements in the country and must also appoint an auditor. 
 

Partnerships and other types of business forms in Estonia  

 
The general and limited partnerships in Estonia are formed by two or more partners that have a common business goal. In case of the general partnership, the founders are solely liable for the obligations of the company. When forming a limited partnership only one of the members is fully liable while the other is only liable to the extent of the contributions made. No minimum share capital is required for partnerships in Estonia
 
The branch is a preferred business form for foreign companies looking to establish their presence on the Estonian market. Unlike the subsidiary, the branch is not considered a legal entity and it relies fully on the mother company abroad.
 
The sole proprietorship is the simplest business form in Estonia and it is established by a natural person who opens a business on his own. No distinction is made between the owner and the company, meaning that the individual is fully liable for the debts and obligations of this company. The sole proprietorship must be registered with the Commercial Register before engaging in any business activities.

If you  need more information about the incorporation process for each company type, as well as tax obligations in Estonia and requirements for financial reporting, you may contact our company registration experts in Estonia
 
For detailed legal information and legal consultancy we recommend our partner law firm in Estonia
 

 

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