
Entrepreneurs who are carrying out
business activities in Estonia are allowed to change the
legal entity under which their
company is working at the moment, in accordance with the rules and regulations imposed by the local authorities. In other words, when
opening a company in Estonia, the business is not required to be maintained under the same
legal entity until the investors choose to shut it down or to dissolve it. This option is available due to a set of factors, such as the
development of the company to an extent in which the current legal entity can no longer represent the best interests of the businessmen.
Our team of Estonian company formation representatives can provide assistance on the changing procedure.
Why change the legal entity?
The
Estonian legislation allows businessmen to change various
legal entities in other
business forms. This type of procedure can be necessary in some cases, for example, when the investor wants to have other types of obligations and rights (more or less). Over the years, the business may be better represented if it would be carried out under a different
company type.
A
partnership in Estonia can be changed into a
limited liability company or a
corporation. At the same time, the
corporation can be set up under other type of legal entity;
our team of Estonian company formation consultants can offer more details in this sense.
Change a sole proprietorship into a limited company in Estonia
One of the most common changes referring to the
legal entity is the transformation of the
sole proprietorship, which is the simplest type of business form, into a
limited liability company (LLC).
Under the local legislation, between the investor and the
legal entity there are no difference in terms of liabilities, which means that the businessman can become liable with his personal assets for the debts incurred through the business. In order to
change it, the investor should close down the
sole proprietorship, and open a new business as required by the
LLC incorporation procedure.
The main advantage of a LLC is that there is a very clear distinction between the investor and the company, which is a separate entity.