At one point, there might be a reason you would like to end your business activities in Estonia. Either something did not go as expected, and you need to close down your business by liquidating it, or either there is somebody eager to buy a company from you so you can sell it.
Since Estonia has no way to hibernate or pause the business activities, we give you the 4 most common ways to end your Estonian business properly with the business flows.
#1 Liquidation / Dissolution of your Estonian company
The most common option to stop all your Estonia business activities is voluntary liquidation. You can start the liquidation process with the consent of the 2/3 votes of the shareholders. In Estonia, it is also mandatory to have a local liquidator to protect creditors’ interests.
Your company needs to be solvent for liquidation. Otherwise, bankruptcy proceedings need to be initiated.
Preparation for Estonian Company Liquidation
Before starting the liquidation process, it is necessary to stop all the business activities and settle everything, such as:
- pay all the taxes;
- settle all debts and claims;
- close all business bank accounts.
Accounting must be composed and the final accounting report submitted before initiating liquidation.The company dissolution process takes at least 7 months, but it is a passive period for the company if you use the help of a service provider.
Important: After starting the liquidation process, you are not allowed to be involved in any business activities, and your company will be shown in the Business Register as “in the process of liquidation” (Likvideerimisel)
Let us know if you have any questions or wish to liquidate your company.
The process of the voluntary liquidation of your Estonian company. Step-by-step:
- Closing the company’s bank account;
- We will draft shareholder’s resolution to start the liquidation proceedings
- (For non-residents: we will also prepare a petition for the Estonian Commercial Register to initiate the liquidation proceedings. The petition must contain a notarized signature and apostille if needed.);
- (For e-residents: the petition will be submitted via Estonian Commercial Register’s web portal with your e-residency card.);
- If you are a non-resident, the liquidation proceedings will be started via Estonian notary after we have received a resolution and a petition;
- Preparation and submission of the liquidation report;
- Preparation of the final report after 4 months from the liquidation registration;
- Submitting a deletion petition after 3 months from the final report’s approval.
- Notify you about the successful process.
#2 Selling your Estonian company
Selling the shares from your Estonian companies is the fastest way to step back from a company once you don’t want to be included in business activities anymore.
The process of selling your company shares takes at least 2 weeks. All depending on the notary and the complexity of the transaction.
Selling an Estonian Company – Process flow for E-resident.
If you are an e-Resident, the share sale process is easy and done remotely via online e-notary:
- You give us info about the wish to sell your company shares as well the copy of the needed documents;
- If needed, you will send us necessary documents (questionnaire, registry card, marriage certificate etc);
- We book a notary appointment for the share sale process;
- We inform you about the process of selling a company and hand instructions for the transaction;
- You can make a remote transaction via e-notary during the proposed time.
We keep you in a loop during all the processes to make it as easy and smooth for you as possible.
Selling an Estonian Company – Process flow non-E-resident.
If you are not an e-Resident yet, you can still sell your Estonian company, and we try to make the process as smooth as possible. With our help, all the process happens remotely.
- You give us info about the wish to sell your company as well the copy of the needed documents;
- We prepare a POA (Power of Attorney) for you to sign at your local notary office (and if needed, add an apostille)
- After we have received the POA and other necessary documents (questionnaire, registry card, marriage certificate, etc.), we book an appointment at the notary office;
- You can make a remote transaction via e-notary during the proposed time.
- At the appointment, we will prepare a new shareholders list for the new board member to sign;
- As a last step of the process, we will legally represent you at a notary office and inform you about completing the transaction and about the changes in the e-Business Register.
In questions let us know about the wish to sell your company.
#3 Merging the company with personal assets to end business activities
Suppose you are a sole shareholder of your Estonian company and would like to close your company in an easier and faster way than liquidation.
In that case, it is possible to merge the company with your personal assets. This exit option is the fastest as it does not involve a company liquidation as the most time-consuming way to exit from the business in Estonia. Merging with personal assets takes approximately two months, depending on the notary and the complication level of the transaction.
In case you wish to merge the company with your personal assets, let us know.
The process of merging an Estonian company with your personal assets is following:
- You give us wish and information about the merge company with personal assets;
- Money from the company’s business bank account will be transferred to your bank account (if taxes have to be paid, then a certificate of paid taxes has to be received from the tax office);
- If you are a non-resident, we will draft a POA (power of attorney) for the client to sign at your local notary office;
- If you are married and your spouse doesn’t have an e-residency card, a POA has to be drafted for them to sign at a notary office as well.
- We will book a notary appointment and inform you about the process of merge;
- Concluding a merger agreement at a notary office (if you have an e-residency card, we will guide you to make a remote transaction via e-notary; if you are non-resident, we will represent you remotely via e-notary);
- Publishing an Official Announcement in Official Newspaper (for non-residents: POA is needed);
- After publishing an Official Announcement, we will book a notary appointment to submit a petition to make an entry in the Commercial Register (we will draft a confirmation of insolvency and present a report to a notary). Notary appointment will take place 1 month after publishing the Official Announcement.
In case you wish to merge the company with your personal assets, let us know.
#4 Merging your Estonian companies
If you have two or more companies and keeping multiple companies is not needed anymore, merging them would be the best option for you. Company registration is fast and easy in Estonia and you may have registered more companies than you actually need for your business. To close the company you no longer need, you can merge it with the one you wish to keep for the business.
To prepare the merger, the accounting reports of the company you wish to close must be up to date. All assets and liabilities will transfer to the remaining company and the other company will be deleted from the Business Register. It takes 2 months to close the company by the merger.
For e-residents, the merger process is fully online. For non-residents it requires one visit to the notary in your country for signing the power of attorney when you use 1Office service.
There are two options for merging your companies:
- A company merges with another company, and the acquired company will be dissolved. The shareholders of a company being acquired shall become shareholders of the acquiring company upon merger.
- Companies merge to form a new company. Upon the foundation of a new company, the shareholders of the merging companies shall become the new company’s shareholders. Therefore, the merging companies will be dissolved.
After the merge, all assets and liabilities will be transferred to acquiring company. Merging the companies takes about two months depending on the difficulty of the merger, the number of shareholders, etc.
The process of merging the companies – step-by-step:
- You give us information about the merge wish;
- If you are non-resident, we will draft a POA (Power of Attorney) for the client to sign at your local notary office;
- We will book a notary appointment for the merge and inform you about the further process;
- Concluding a merger agreement at a notary (if you have an e-residency card, then we will guide you to make a remote transaction via e-notary; if you are non-resident, we will represent you remotely via e-notary);
- We will draft a shareholders resolution to confirm the merge;
- Publishing an Official Announcement in Official Newspaper (Ametlikud Teadaanded), (if non-resident, POA is needed) – to make sure all the process is legal according to law;
- After about 1 month from concluding the merger agreement, we will book another appointment at a notary to submit a petition to Estonian Commercial Register for the company being acquired to be deleted.
- After about two months from concluding a merger agreement the company being acquired will be deleted from the Estonian Commercial Register.
- Creditors of the company being acquired will have 6 months to submit their claims against the company.
In case you wish to merge the companies, let us know.
Choose the right service provider
No matter which option is the most suitable for you, it is crucial to ensure that the company will be deleted from the Business Register at the end of the process. As the methods are rather complicated, we suggest ordering these from experienced service providers.
What to note about Service Provider?
We recommend comparing service providers’ prices and asking specific questions about what the price includes to avoid unsatisfying outcomes.
For example, suppose you decide to go with a voluntary liquidation. In that case, you must bear in mind that it is a long process and involves a liquidator who keeps an eye on your business during the whole process and makes sure all is in order. They also ensure that the company will be deleted in the end. Therefore, what you will get for the value of money might be questionable if this service’s price is on the lower back.
1Office has 13 years of experience helping foreigners with the legal help of selling company shares, merging companies, and liquidating them. Today we help foreigner company owners with the whole lifecycle of the companies – to start the company abroad, open bank accounts, accounting as well as all the legal questions.
Contact us for more info or assistance.