Winding up an Estonian Company

If unforeseen circumstances arise that interfere with normal business operations, and it becomes apparent that the company is no longer profitable, it makes sense to consider liquidation. The Company for Business OÜ team will assist in all stages of the process.

Liquidation of a company is a legal process that results in the complete termination of the financial and economic activities of the company and exclusion of the company from the Estonian commercial register. Specialists of Company for Business OÜ will help you go through the procedure of company liquidation in the shortest possible time in full compliance with the legislation and completely remotely.

Many entrepreneurs in Estonia prefer not to dissolve their companies in accordance with local legislation. However, practice shows that neglecting a failed company in Estonia can be a very expensive lesson, as it can negatively affect the possibility of starting a new business or the chances of obtaining or extending a residence permit or visa in Estonia.

Liquidation reports	650 EUR
Liquidation of an Estonian company	1,350 EUR
Presentation of a participant by a power of attorney	790 EUR
Notary services and state fee	200 EUR

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Smooth Closure for Your Estonian Company

HOW TO LIQUIDATE AN ESTONIAN COMPANY LEGALLY

The law prescribes the liquidation procedure in detail. The liquidation process usually takes 8 to 10 months.

In situations where the owner of the company, who has initiated the liquidation process, is unable to satisfy the legitimate claims of creditor(s), the liquidator of the company or a member of the board of directors of the company must apply to the court to declare the company bankrupt. Failure to do so may result in civil and/or criminal liability.

The owner may also draw up a notarised liquidation petition on behalf of the company. This can be done personally by a member of the management board in the presence of a notary or by power of attorney through the owner’s representative in Estonia.

According to the Estonian Commercial Code, the liquidation procedure of a company shall include the following:

Submission of the liquidation resolution and statements of the company’s major shareholders
Appointment of a liquidator, who must be a resident of Estonia
Publication of a notice of the company’s liquidation in the Estonian media
Verification of creditors’ claims
Preparation of the company’s balance sheet and profit distribution plan.
Exclusion of a company from the electronic commercial register by a relevant court decision

STAGES OF COMPANY LIQUIDATION

At least 2/3 of the owners attending the meeting must approve the resolution to voluntarily liquidate the business and appoint a liquidator.

At least one of the liquidators must be an Estonian resident. After the final decision on winding-up has been made, the company may not carry out business activities. Only actions necessary for the liquidation of the company may be taken.

The member of the management board and the authorised liquidator sign and submit to the Commercial Register a notarised application for the liquidation of the company and the appointment of liquidators. The application is submitted electronically on the Entrepreneur Portal together with the minutes of the general meeting on the closure of the company.

Notice of the liquidation is published in the public domain, followed by a notice to all known creditors.

Within the first three months after the commencement of the liquidation process and four months after the publication of the notice of liquidation and the satisfaction of all creditors, the final accounts and asset distribution plan of the remaining assets are submitted to the shareholders. If the assets of the liquidated partnership are insufficient to pay all debts, the liquidator must immediately file a bankruptcy petition explaining the financial insolvency.

Upon completion of the liquidation (not earlier than 6 months after filing the application for liquidation of the company), the liquidator shall submit to the Commercial Register a certified application for the company’s removal from the Commercial Register.

Basic conditions for the liquidation of an Estonian company

The procedure takes about 6-8 months to complete.
To start the procedure, the company must file annual reports.
The company must have no debts prior to liquidation.

Assistance with company liquidation includes

Appointment of a local liquidator
Preparation of legal documents
Formalisation of the application for liquidation of the company
Filing of all liquidation reports

Simplified liquidation of a company

As of 01.02.2023, a simplified liquidation procedure has become available for companies that have not yet started their business. This procedure allows the owners of companies in Estonia who have not started doing business on behalf of their company to remove their company from the register in a shorter period of time.

The main steps in the process

1. Submission of an application to the business register:

An application to remove the company to the Commercial Register must be submitted. All board members and shareholders of the company must sign the application and confirm that the company has not yet commenced operations or opened bank accounts.

2. Publication of a notice of dissolution of the company:

The company publishes an announcement in the Public Gazette (Ametlikud Teadaanded) announcing the company’s decision to cease operations and request removal from the Register. Interested parties or creditors may raise objections within 4 months.

3. Deletion from the Register:

After 4 months from the date of publication of the winding up notice, the company will be removed from the Commercial Register and the process will be deemed complete.

It is important to note that in the context of a simplified liquidation of an Estonian company, the absence of activity means that the company has not entered into any contracts and has not been financially active.

FREQUENTLY ASKED QUESTIONS

Main stages of liquidation of the Estonian Company:

Making a decision to discontinue operations
Appointment of liquidator
Submitting an application to the Registry
Public notice
Satisfaction of creditors’ claims
Final balance sheet and distribution of assets
Deletion from the register

There are currently 2 ways to close a company in Estonia – ordinary liquidation and a simplified procedure for companies that have not had any activity.

The company liquidation process in Estonia takes 6 to 9 months.

The liquidator of the company must publish in the Public Gazette (Ametlikud Teadaanded) a notice of the liquidation of the company and provide contact details to which interested parties can submit their claims or objections.

The liquidation petition will be published in the Public Gazette (Ametlikud Teadaanded) for at least 4 months so that all creditors can file their claims against the company.

All debts, loans and other liabilities must be closed before the liquidation process can begin. As well as the company’s bank accounts, and all assets must be distributed.

Simplified liquidation is a procedure for dissolving an Estonian company that has not started business activities or opened bank accounts.

The main stages are:

Submitting an application
Compliance with the time limits prescribed by law
Deleting a company from the Register

A simplified company liquidation process takes 3-4 months.

We offer you professional support in the matter of liquidation of the company and will help you to complete the activity and exclude your company from the Register in the shortest possible time and with minimal involvement on your part.