Estonia Commercial Code - Public Limited Company

Part VII PUBLIC LIMITED COMPANY 

Chapter 23 GENERAL PROVISIONS  

§ 221. Definition of public limited company

 (1) A public limited company is a company which has share capital divided into public limited company shares.

 (2) A shareholder shall not be personally liable for the obligations of the public limited company.

 (3) A public limited company shall be liable for performance of its obligations with all of its assets.

§ 222. Share capital

  Share capital shall be denominated in euros. Share capital shall be at least 25 000 euros.

§ 2221. Share with nominal value and without nominal value

 (1) A share may be issued as share with nominal value or share without nominal value. The simultaneous issue and use of shares with nominal value and without nominal value is prohibited. Any shares issued in contradiction to the requirement specified in the previous sentence shall be null and void. The second sentence of subsection 223 (3) of this Code shall apply respectively.

 (2) An equal part of the share capital shall conform to all shares without nominal value. The part of the share capital corresponding to one share without nominal value (book value of the share) shall be established by dividing the share capital by the number of shares.

 (3) A public limited company, which has issued shares with different nominal value, may introduce shares without nominal value in case the equalisation of the nominal values of the shares is decided prior to the introduction of the share without nominal value.

 (4) The number of shares without nominal value shall be deemed to be effected as of the making of an entry in the commercial register.

Chapter 24 SHARE  

§ 223. Nominal value and book value of share

 (1) The minimum nominal value or book value of a share shall be ten cents.

 (2) If the nominal value of a share is greater than ten cents, the nominal value shall be a multiple of ten cents.

 (3) Shares with a nominal value or book value of less than ten cents shall be void. The issuers shall be solidarily liable for any damage caused by the issue of such shares.

§ 224. Indivisibility of share

  A share shall be indivisible.

§ 225. Issue price of share

 (1) The issue price of a share shall not be less than the nominal value or book value of the share.

 (2) The issue price of a share may be greater than the nominal value or book value of the share (premium). A premium is adjusted in the cases prescribed by the applied accounting practices. A premium may be used:
 1) to cover a loss of the public limited company if such loss cannot be covered by undistributed profit from previous periods or the legal reserve prescribed in the articles of association;
 2) to increase share capital by a bonus issue.

 (3) The issue price of a share shall be paid in full by the subscriber upon issue of the share.

§ 226. Rights attaching to share

  A share shall grant the shareholder the right to participate in the general meeting of shareholders and in the distribution of profits and, upon dissolution, of the remaining assets of the public limited company, as well as other rights provided by law or prescribed by the articles of association.

§ 2261. Share subscription

 (1) By share subscription, a subscriber shall receive the right to receive a share and shall undertake to pay for it.

 (2) A subscriber may be given a certificate of subscription concerning shares which are subscribed for.

 (3) A subscriber may transfer the rights and obligations attaching to a subscription. If the shares are not paid for in full, the subscriber and the transferee shall be solidarily liable for payment. The provisions for transfer of registered shares shall apply to delivery of certificates of subscription.

§ 227. [Repealed - RT I 2000, 57, 373 - entry into force 01.01.2001]

§ 228. Registered shares

 (1) Shares shall be registered. Shares shall be entered in the Estonian Central Register of Securities. Upon foundation of a public limited company, a notice from the registrar of the Estonian Central Register of Securities concerning registration of the shares shall be annexed to the application to be submitted to the registrar of the commercial register.

 (2) The rights attaching to a registered share shall belong to the person who is entered as the shareholder in the share register.

 (3) [Repealed - RT I 2000, 57, 373 - entry into force 01.01.2001]

 (4) [Repealed - RT I 2000, 57, 373 - entry into force 01.01.2001]

 (5) [Repealed - RT I 2000, 57, 373 - entry into force 01.01.2001]

§ 229. Transfer of registered share

 (1) Registered shares may be freely transferred.

 (2) The articles of association may prescribe that, upon transfer of shares to third persons, other shareholders have a pre-emptive right which applies to each transfer of shares for charge and the term of which shall not exceed two months as of the presentation of the transfer agreement. The seller shall notify the management board of the public limited company of entry into a contract of sale, which shall promptly notify the other shareholders thereof. The provisions of the Law of Obligations Act concerning the right of pre-emption otherwise apply to the right of pre-emption and exercise thereof.

 (21) The shareholders may exercise their right of pre-emption only jointly to the full extent thereof. If one of the shareholders waives the right of pre-emption, the others have the right to exercise the right of pre-emption jointly and to the full extent.

 (22) If the articles of association of the company prescribe the right of pre-emption for the shareholders, a notation concerning the right of pre-emption shall be registered at the request of the company in the Estonian Central Register of Securities. The disposal of share after the entry of a notation in the register is void to the extent that this prejudices or restricts the exercise of the right of pre-emption.

 (3) [Repealed - RT I 2000, 57, 373 - entry into force 01.01.2001]

 (4) The transferee has the right to demand to be entered as a shareholder in the share register. For the purposes of the public limited company, the share shall be deemed to be transferred as of entry of the transferee in the share register.

§ 230. [Repealed - RT I 2000, 57, 373 - entry into force 01.01.2001]

§ 231. Transfer of share to successor

  Upon the death of a shareholder, the share shall transfer to a successor of the shareholder.

§ 232. Pledging of share

 (1) A share may be pledged unless the articles of association prescribe otherwise.

 (2) In order to pledge a share, a written disposition shall be prepared concerning the establishment of the pledge and a notice concerning the pledge shall be entered in the Estonian Central Register of Securities.

 (3) Upon pledge of a share, the pledgor shall exercise the rights attaching to the share.

§ 233. Share register

 (1) A share register concerning registered shares shall be kept which shall set out:
 1) the name, address and personal identification code or registry code of the shareholder;
 2) the class and nominal value of the shares;
 3) the date of subscription and acquisition of the shares.

 (4)

 (2) The share register shall be maintained by the registrar of the Estonian Central Register of Securities. The information contained in the share register shall be determined by legislation regulating the maintenance of the Estonian Central Register of Securities. The management board of the public limited company shall ensure timely submission of correct information provided by law to the person maintaining the share register.

§ 234. Access to share register

 (1) The share register may be examined in accordance to the provisions of the Estonian Central Register of Securities Act.
[RT I 2006, 55, 407 - entry into force 01.01.2007]

 (2)

§ 235. Classes of shares

 (1) Rights attaching to shares may be different in the case of distribution of profit according to the articles of association and in the event of division of remaining assets upon liquidation of the public limited company. Shares with the same rights form a class of shares.

 (2) Rights attaching to a class of shares may be amended by a resolution of the general meeting by at least a four-fifths majority of votes in favour unless the articles of association prescribe a greater majority requirement. At least nine-tenths of the shareholders whose shares belong to the class of which the rights are amended must vote in favour of the resolution.

 (3) The management board shall promptly notify all holders of registered shares in writing of an amendment to the rights attaching to a class of shares.

§ 236. Right to vote

 (1) Each share shall grant a separate vote unless otherwise provided by law.

 (2) Shares with equal nominal values shall grant an equal number of votes. If the public limited company has shares with different nominal values, the difference in votes granted by them shall correspond to the difference in nominal values.

 (3) Shares without nominal value shall grant an equal number of votes.

§ 237. Preferred share

 (1) A public limited company may issue non-voting shares which grant the preferential right to receive dividends and to participate in the distribution of the remaining assets of the public limited company upon dissolution (preferred shares). The owner of a preferred share has all the rights of a shareholder with the exception of the right to vote.

 (2) The sum of the nominal values or book values of preferred shares shall not be greater than one-third of the share capital.

 (3) The articles of association may prescribe that a preferred share shall grant the right to vote in the adoption of certain resolutions (restricted voting right).

 (4) The consent of all holders of preferred shares is required to adopt a resolution on cancellation or amendment of the preference of preferred shares, or on cancellation of preferred shares. Upon cancellation of the preferential right, the holders of preferred shares shall acquire the right to vote.

§ 238. Dividend on preferred share

 (1) A holder of a preferred share shall be paid a dividend prior to the payment of dividends to other shareholders. The dividend shall be specified in the articles of association as a percentage of the nominal value or book value of the share unless the articles of association prescribe otherwise.

 (2) The holder of a preferred share may be paid a larger dividend than prescribed by the articles of association.

 (3) If the public limited company does not have distributable profit or if it is insufficient, the dividends to holders of preferred shares may be left unpaid in whole or in part. The unpaid part shall be added to the dividend to be paid the following year, including interest in the amount provided by law.

§ 239. Acquisition and loss of right to vote

 (1) If the holder of a preferred share is not paid dividends in full during two financial years, the holder of a preferred share shall acquire the right to vote. In case of a share with nominal value, the holder of a preferred share shall acquire the right to vote according to the nominal value of the share; in case of a share without nominal value, the holder of a preferred share shall acquire the right to vote according subsection 236 (3) of this Code. The votes attaching to preferred shares shall be included in the quorum of the general meeting.

 (2) The holder of a preferred share shall lose the right to vote on the last day of the financial year during which a dividend is paid in full.

 (3) Acquisition of the right to vote shall not exempt the public limited company from its obligation to pay dividends for the previous years and the interest provided by law, nor cancel the preferential right of the holder of a preferred share to receive dividends and to participate in the distribution of remaining assets upon dissolution.

§ 240. [Repealed - RT I 2000, 57, 373 - entry into force 01.01.2001]

§ 241. Convertible bond

 (1) If prescribed in the articles of association, a public limited company may issue, for a conditional increase of the share capital, bonds by a resolution of the general meeting, the holders of which have the right to convert their bonds to shares (convertible bond).

 (2) A convertible bond may be registered.

 (3) Convertible bonds may be issued after entry of the public limited company in the commercial register.

 (4) At least the nominal value of a convertible bond shall be paid for the convertible bond, in money. The nominal value or book value of shares issued for the bond may be greater than the nominal value of the bond only if this difference is paid for in money.

 (5) The sum of the nominal values of convertible bonds shall not be greater than one-third of the share capital.

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