How can a company be liquidated in Estonia?
An Estonian company can be liquidated voluntary or compulsory.
The voluntary decision is taken by the general meeting of the shareholders, while the compulsory liquidation is taken by a competent court. The reasons a company is compulsory liquidated are various and may be caused by the lack of organization of general meetings of the company for more than two years, the expiration of the term stated in the Articles of Association, the lack of management board election.
What are the steps for company liquidation in Estonia?
An Estonian company "likvideerimisel" (in liquidation) is a result of a general meeting decision or a result of a decision taken by the Court. The main regulations related to the Estonian liquidation are stipulated in the Commercial Code.
A voluntary liquidation requires at least two thirds of the votes to be in favor of the liquidation. During this meeting, the preceding annual repost and an overview of the economic activities must be presented by the company’s management.
It’s also necessary to settle a term for covering the outstanding claims during this meeting.
After the meeting, or after the Court decision, the Commercial Registry must be notified regarding the liquidation process. The request from the company’s management is usually accompanied by the minute of the meeting where the decision was taken.
The liquidator or the committee of liquidators is appointed in order to take all the measures necessary to close the liquidation. It’s mandatory that at least one liquidator is Estonian resident and must be member of the formal management board. In certain situation, when the articles of association decide so, the liquidator can be a third party.
The court is responsible for choosing a liquidator for the compulsory liquidation and must decide what remuneration will be granted to it.
His name(s) and signature specimen(s) must be recorded in the Commercial Register.
The following responsibilities are it assigns to the liquidator: the elaboration of a notification in the official gazette Ametlikud Teadaanded, the notification of all the creditors regarding the process and a timeframe when the claims can be deposited, auction the company’s assets if the funds are not covering all the debts, present the status of the liquidation in front of the general meetings.
The claims can be submitted no later than 4 months from the liquidation notification along with supportive documentation (which will be checked by an authorized auditor).
After covering the claims, the remaining assets are distributed among the shareholders depending on their contribution to the company’s capital. The payments are usually made in money.
The last step of the liquidation is the elaboration of a final balance sheet and its presentation in a general meeting. A petition for deletion from the Commercial register must be elaborated and the liquidator is paid and then dismissed.
How long does it take to liquidate a company in Estonia?
Usually the whole process of covering the claims of the creditors and the process of dividing the remaining assets to the shareholders takes around six months but the whole process of cancelation from the Commercial registers may take longer depending on the size of the company and the way was liquidated, voluntary or compulsory.
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