Liquidation of Estonian Company / Company Dissolution Package

for dormant and trading companies registered in Estonia    Do you have a limited liability company? Do you want to close down a business?

1. Dissolving a company by court decision – A company can be dissolved by court order in Estonia if it is found to be operating in violation of the law or if it has breached its obligations in a way that cannot be remedied. This typically involves a court hearing and a decision by a judge to dissolve the company.
2. Dissolving a company by bankruptcy – If a company is unable to pay its debts, it can be declared bankrupt by a court in Estonia. In this case, a liquidator is appointed to manage the company’s affairs and wind up its operations. Once all of the company’s assets have been sold and its debts have been paid, the company is dissolved.
3. Discontinuing bankruptcy proceedings without bankruptcy – If a company is in the process of bankruptcy proceedings but its financial situation improves and it is able to pay its debts, it may be possible to discontinue the bankruptcy proceedings without going through with the actual bankruptcy. In this case, the company can resume normal operations and avoid being dissolved.
4. Dissolving a company by another legal basis or as a result of provisions in the articles of association: In addition to the above methods, a company can be dissolved in Estonia by other legal means, such as if it is found to be operating illegally or if its founders agree to dissolve the company as specified in the articles of association. This typically involves a process of notifying the Estonian Business Register and settling any outstanding debts or obligations.

To dissolve the company, the partners must pass a resolution with a 2/3 majority vote. Following this, the management board of the company is required to provide shareholders with an annual report for the current accounting year, as well as an overview of the company’s economic activities.

§ 204. Petition for dissolution of private limited company
(1) The management board shall submit a petition for entry of the dissolution resolution of the private limited company in the commercial register. The resolution of the shareholders and the minutes of the meeting of shareholders or, in the cases provided for in § 173 of this Code, the record of voting shall be appended to the petition.

(2) If a private limited company is dissolved on the basis of a court decision, the court shall send the decision to the commercial register for entry.

(3) A private limited company is deemed to be dissolved as of the making of the entry on dissolution in the commercial register. Compulsory dissolution enters into force as of the entry into force of the court decision.
[RT I 2005, 57, 449 – entry into force 01.01.2006]

Source:  https://www.riigiteataja.ee/en/eli/ee/523072020002/consolide/current

The company must indicate the liquidators. A member of board may be an liquidator if the articles of association, a resolution of shareholders, a court rouling prescribes otherwise.
The place of residence of liquidator shall be in Estonia. The liquidators are liable in the same manner as company members for any damage caused.

How to close company in Estonia?

1. Resolution of the shareholders about the dissolution: The first step in dissolving a company in Estonia is for the shareholders to adopt a resolution about the dissolution of the company. This decision needs to be made by a qualified majority vote, usually 2/3 of the shares.
2. Submitting the application for dissolution: After the shareholders have adopted a resolution, the company needs to submit an application for dissolution to the Estonian Business Register. The application should include details about the liquidators, who will be responsible for managing the dissolution process.
3. Appointment of liquidators and entry of their names into the Commercial Register: The company must appoint one or more liquidators, who will be responsible for winding up the affairs of the company. The names of the liquidators must be entered into the Commercial Register.
4. Publication of a notice regarding liquidation of a public limited company in the Ametlikud Teadaanded: If the company is a public limited company, a notice of the liquidation must be published in the Ametlikud Teadaanded, which is the official gazette of Estonia.
5. Notification of all known creditors: The liquidators are required to notify all known creditors of the company about the liquidation process. This includes giving them notice of the deadline for submitting their claims.
6. Preparation of the opening balance sheet of the liquidation and the annual report, approval thereof by the shareholders, and submitting it to the register: The liquidators are required to prepare an opening balance sheet of the company’s assets and liabilities, as well as an annual report for the current accounting year. These documents need to be approved by the shareholders and submitted to the Estonian Business Register.
7. Selling the assets, collecting the debts, and satisfying the claims of the creditors of the private limited company: The liquidators are responsible for selling the assets of the company, collecting any debts owed to the company, and satisfying the claims of the company’s creditors.
8. Preparation of the final balance sheet and asset distribution plan: Once all of the company’s assets have been sold and its debts have been paid, the liquidators must prepare a final balance sheet and asset distribution plan. This plan outlines how the remaining assets of the company will be distributed among the shareholders.
9. Distribution of assets between shareholders: The assets of the company are then distributed among the shareholders in accordance with the asset distribution plan.
10. Submission of an application for the deletion of the private limited company from the commercial registry to the register: Once all of the assets have been distributed and all of the liquidation process has been completed, the company must submit an application to the Estonian Business Register for the deletion of the company from the commercial registry.

Closing a company in Estonia is quite a complicated and time-consuming process .  Eesti Consulting as member of e-Residency Marketplace will help you dissolve a company in Estonia.