Estonia is one of the most attractive countries for entrepreneurship due to its translucent business environment, as well as the possibility to quickly and simply register a new company. Therefore, many companies and enterprises for various business projects and needs are created by foreign investors within Estonia.
However, just like in any other country, not all projects get to the stage of beginning of active commercial activity, and sometimes the founders make a decision to terminate the development of the project and suspend further investments for one reason or another; in such cases the liquidation of the company is needed. We are going to break the process of simplified liquidation of the company in Estonia down and look at the key moments of the liquidation procedure for Estonian enterprises which were registered but did not start any economic activity.
Liquidation of the company is a process of termination of activity of the company, which includes payment of all liabilities and debts, distribution of the remaining assets among the shareholders and removal of the company from the Commercial Register. Usually the procedure of liquidation of the Estonian company takes from 9 to 12 months and assumes the presence of a liquidator, as well as fulfillment of a range of procedures considered by the law.
Simplified liquidation procedure
However, on February 1, 2023 the new Commercial Register Act, the provisions of which allow the entrepreneurs who did not start any economic activity perform the procedure of company liquidation in a simplified and accelerated manner, took effect. According to § 63 of the Commercial Register Act, the company may request being removed from the register in case if it did not start any activity and this circumstance is approved by all the board members (directors) and shareholders (members) of the company. Therefore, the act does not establish any requirements for removal of the company which did not conduct any economic activity (there were no transactions or deals) from the register. Within the framework of the simplified procedure there is no requirement for submission of annual reports and liquidation balance sheets; also, the liquidator is not required to be appointed. After receiving the application, the Commercial Register is going to publish the corresponding notification in the Official Announcements (Ametlikud teadaanded in Estonian) and to remove the company from the lists in 3 months.
Therefore, at the beginning of 2023, an opportunity to liquidate companies, the activity of which was not started and which the founders no longer needed, was introduced in Estonia at the legislative level. This will doubtlessly make Estonia even more attractive for the foreigners to register their enterprises, because in case of unfortunate circumstances the liquidation of a legal entity is not going to cause any inconveniences or difficulties for their founders. However, it should be noted that this procedure is established for limited liability companies (Osaühing or OÜ in Estonian) only.
Did you not manage to launch your company and decided to close your business project, as well as to remove the company from the Commercial Register?
Contact our consultants! We will help you perform the company liquidation procedure in a simplified form; in 3 months, the records of your company will be completely removed from the register.