Estonia Commercial Code - Sole Proprietorship

Estonia Companies Act

Estonia Companies Act Estonia Companies Act Estonia Companies Act

Part III SOLE PROPRIETORSHIP

§ 75. Petition for entry in commercial register and information to be entered in commercial register

 (1) A sole proprietor shall be entered in the commercial register on his or her petition, or on another basis provided by law. The petition shall set out the data specified in subsection (2) of this section and, additionally, the data pertaining to the person's telecommunications (telephone and fax numbers, e-mail and Internet website addresses, etc.) and information on the planned principal activity.

 (2) The following shall be entered in the commercial register with regard to a sole proprietor:
 1) the business name of the undertaking, the registered office and address of the enterprise, and the beginning and end of the financial year of the enterprise;
 2) name and personal identification code of the undertaking;
 3) other information provided by law.

§ 76. [Repealed - RT I 2008, 60, 331 - entry into force 01.01.2009]

§ 77. Accounting

  A sole proprietor shall organise his or her accounts pursuant to the Accounting Act.

§ 78. Liability

  A sole proprietor shall be liable for his or her obligations with all of his or her assets.

Part IV GENERAL PARTNERSHIP 

Chapter 12 DEFINITION AND FOUNDATION OF GENERAL PARTNERSHIP  

§ 79. Definition of general partnership

  A general partnership is a company in which two or more partners operate under a common business name and are solidarily liable for the obligations of the general partnership with all of their assets.

§ 80. Partner

 (1) A natural person or legal person may be a partner in a general partnership.

 (2) A local government shall not be a partner in a general partnership.

 (3) A new partner may be admitted into a general partnership only with the consent of all partners.

§ 81. Registered office

 (1) The registered office of a general partnership shall be the place from which the general partnership is managed or the place the general partnership operates.

 (2) The registered office of a general partnership shall be determined by the partnership agreement.

§ 82. Partnership agreement

 (1) A general partnership shall operate on the basis of a partnership agreement concluded by the partners. The partners shall agree on:
 1) the business name and registered office of the general partnership;

 (2) [Repealed - RT I 2006, 61, 456 - entry into force 01.01.2007]
 3) the amount of the contributions of the partners;
 4) other obligatory terms and conditions provided by law.

 (2) The partners may also agree on other terms and conditions which are not in conflict with the law. If agreed terms and conditions are in conflict with the law, the provisions of law shall apply.

 (3) The partnership agreement may be amended only with the consent of all partners. The partnership agreement may prescribe cases in which the partnership agreement may be amended by a majority vote. The partnership agreement shall not be amended by a majority vote of less than three-quarters of all votes.

 (4) The partnership agreement may prescribe that a partner has different rights and obligations than the other partners, with the consent of the partner. These rights and obligations may be amended or terminated only with the consent of the partner.

§ 83. Petition for entry in commercial register

 (1) A petition for entry in the commercial register shall set out the information specified in § 84 of this Code. The petition shall be signed by all partners.

 (2) The petition shall additionally set out the data pertaining to the general partnership's telecommunications (telephone and fax numbers, e-mail and Internet website addresses, etc.) and information on the planned principal activity.

 (3) Any other petition submitted to the commercial register shall be signed by a partner entitled to represent the general partnership. If the partners are only entitled to represent the general partnership jointly, the petition shall be signed by all partners entitled to represent the general partnership jointly.

 (4) If an amendment to an entry or a new entry is applied for by a petition submitted to the commercial register, the corresponding resolution of the partners shall be appended to the petition. Upon entry or deletion from the register of a new partner, such partner shall also sign the petition submitted to the registrar unless the partner has been excluded from the partnership or is deceased.

§ 84. Information to be entered in commercial register

  The following shall be entered in the commercial register:
 1) the business name of the general partnership;
 2) the registered office and address of the general partnership;
 3) the beginning and end of the financial year of the general partnership;
 4) the names, personal identification codes or registry codes of the partners;
 5) the partners authorised to represent the general partnership and which of them are entitled to represent the general partnership jointly;
 6) other information prescribed by law.

Chapter 13 RELATIONS AMONG PARTNERS  

§ 85. Equality of partners

  The partners shall be treated equally under equal circumstances.

§ 86. Contributions

 (1) The partners shall make contributions in the amount prescribed by the partnership agreement.

 (2) Contributions shall be equal unless the partnership agreement prescribes otherwise.

 (3) A contribution may be monetary or non-monetary. A non-monetary contribution may also be the provision of services to the general partnership, or the transfer to or use of assets by the general partnership. The monetary value of a non-monetary contribution shall be determined by the partnership agreement. Unless otherwise prescribed by the partnership agreement, assets shall be deemed to be transferred to the ownership of the general partnership, not to its use.

 (4) The contribution of a partner may be increased or reduced only with the consent of the partner.

§ 87. Payment of contribution

 (1) A partner shall pay the contribution during the term determined by the partnership agreement.

 (2) If the term for payment of the contribution is not specified by the partnership agreement, a partner shall pay it promptly after conclusion of the partnership agreement.

§ 88. Management of partnership

 (1) Each partner has the right and the obligation to participate in the management of the general partnership.

 (2) The right to manage may be granted by the partnership agreement to one or several partners. In this case, the other partners shall not participate in the management of the general partnership.

 (3) If several partners are entitled to manage the general partnership, each of them may act independently unless the partnership agreement prescribes otherwise. A managing partner shall not perform an act if another managing partner objects to it.

 (4) If the partnership agreement prescribes that the managing partners of the general partnership may only act jointly, an act may be performed with the consent of all managing partners. An act may be performed without the consent of the other partners if a delay in performance would cause damage to the general partnership.

 (5) The managing partners may jointly grant the right to manage the general partnership to a third person. Each managing partner may cancel the right granted to a third person.

 (6) If there is reason to presume that damage will be caused to the general partnership, a partner who, pursuant to subsection (2) of this section, is not entitled to manage the general partnership may also manage the general partnership to avoid such damage.

§ 89. Scope of competence

  In managing the general partnership, a managing partner may perform acts which are necessary for the everyday economic activities of the general partnership. A resolution of the partners is required for the performance of acts which are beyond everyday economic activities.

§ 90. Taking away management right

  A court may take away the management right of a managing partner at the request of the other partners if there is good reason. The primary good reason shall be non-performance of a material obligation by the partner or inability to manage the general partnership.

§ 91. Relinquishment of management right

  A managing partner may relinquish the management right with good reason by notifying the other managing partners thereof in advance if the relinquishment does not damage the interests of the general partnership.

§ 92. Compensation for expenditure and damage

 (1) The general partnership shall compensate a partner for necessary expenditure made, including expenditure for performance of the general partnership’s obligations, and losses incurred in acting in the interests of the general partnership unless the partnership agreement prescribes otherwise.

 (2) Monetary expenditure made in the interests of the general partnership shall be compensated for to a partner together with interest in an amount provided by law unless the partnership agreement prescribes otherwise.

§ 93. Adoption of resolution of partners

 (1) A resolution of the partners shall be adopted if over one-half of the votes of all partners are in favour unless the law or the partnership agreement prescribes a greater majority requirement. The partners may adopt a resolution only if all partners are notified of the voting in advance.

 (2) The number of votes of a partner shall correspond to the amount of the contribution of the partner unless the partnership agreement prescribes otherwise. If the number of votes of a partner is calculated according to the amount of the contribution of the partner, each one euro of the contribution shall give the partner one vote unless the partnership agreement prescribes otherwise.

 (3) A partner shall not participate in voting and the partners votes shall be subtracted from the quorum if release of the partner from an obligation or liability, entry into a transaction with the partner or assertion of a claim against the partner is being decided.

 (4) A resolution which is in conflict with the law or the partnership agreement shall be declared invalid by a court at the request of a partner if the request is submitted within three months after adoption of the resolution.

§ 94. Right of partner to information

 (1) A partner has the right to obtain information concerning the activities of the general partnership, to examine all documents of the general partnership and to demand a copy of the approved annual report. Upon a resolution of the partners, the right of a partner to obtain information and examine documents may be restricted if there is reason to believe that this may damage the interests of the partnership.

 (2) A partner shall preserve the secrecy of information received concerning the activities and documents of the general partnership unless otherwise decided by the partners or unless the law provides that the information and documents are subject to public disclosure.

§ 95. Prohibition on competition

 (1) Without the consent of the other partners, a partner shall not compete with the general partnership in the same area of activity or participate in a company which competes with the general partnership in the same area of activity, in a capacity which affects the commercial activities of such company. If upon foundation of the general partnership or upon the partner becoming a partner the above circumstances are known to the other partners but no objections are raised, the consent of the other partners shall be deemed to be given.

 (2) The partnership agreement may prescribe a term during which the prohibition on competition specified in subsection (1) of this section is valid with regard to a former partner of the general partnership. The specified term shall not be longer than five years from the departure or exclusion of the partner from the general partnership.

 (3) If the partnership agreement does not prescribe a prohibition on competition with regard to a former partner but the interests of the general partnership require such prohibition, a court may, at the request of the general partnership, impose a prohibition on competition for the term specified in subsection (2) of this section.

§ 96. Violation of prohibition on competition

 (1) Upon violation of the prohibition on competition provided for in § 95 of this Code, the general partnership may demand termination of the prohibited activity, transfer of the income received from the prohibited activity to the general partnership and compensation for damage to the extent exceeding the claimed income.

 (2) A partner who violates the prohibition on competition shall not participate in the adoption of a resolution on assertion of the claim specified in subsection (1) of this section.

 (3) The limitation period for the claim specified in subsection (1) of this section shall be three months from the date the other partners become aware of the violation of the prohibition on competition but not longer than three years from violation of the prohibition on competition. The general limitation period shall apply to a claim for compensation of damage.

§ 97. Profit and loss

 (1) The amount of the share of profit to be distributed among the partners shall be decided by the partners after the end of the financial year on the basis of the approved annual report. If a general partnership compiles the annual report of a consolidation group, the partners shall decide on the amount of the share of profit to be distributed on the basis of the consolidated reports of the consolidation group.

 (11) [Repealed - RT I 2009, 54, 363 - entry into force 01.01.2010]

 (2) Each partner shall receive a part of the share of profit to be distributed corresponding to the amount of the contribution of the partner unless the partnership agreement prescribes otherwise.

 (3) If a partner has not paid the contribution, the contribution shall be recovered from the share of profit apportioned to the partner.

 (4) Losses shall be covered by the partners in proportion to their contributions unless the partnership agreement prescribes otherwise.

§ 971. Approval of annual report and submission to commercial register

 (1) The annual report shall be approved by the partners. If a general partner is a private limited company, a public limited company, a commercial association or a non-profit association, the annual report shall be submitted to the commercial register together with the sworn auditor’s report, if auditing is compulsory, the proposal for the distribution of profit or the covering of loss and the division of the sales revenue within six months as of the end of the financial year.

 (2) Together with the annual report, the commercial register shall be submitted the information regarding the amount of the share of profit to be distributed that was decided pursuant to subsection 97 (1) of this Code or the information regarding the amount of losses covered pursuant to subsection 97 (1) of this Code if the above information is not manifested by the annual report. If the resolution on the distribution of profit or the covering of loss is adopted after the submission of the annual report, the aforementioned information shall be submitted together with the next annual report.

 (3) The division of the sales revenue shall contain information regarding the sales revenue for the accounting year in up to ten major areas of activity pursuant to the Classification of Economic Activities established on the basis of subsection 4 (6) of this Code. In case of the annual report of a consolidation group, the division of the sales revenue is submitted on the basis of the respective information in the unconsolidated income statement of the consolidating entity.

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