Estonia Commercial Code - Shareholder and Public Limited Company

Chapter 26 SHAREHOLDER AND PUBLIC LIMITED COMPANY  

§ 272. Equality of shareholders

  The shareholders shall be treated equally under equal circumstances.

§ 273. Obligation of shareholder to pay contributions

  A shareholder shall not be required to pay a contribution exceeding the nominal value or book value and premium of the share without the shareholder's consent.

§ 274. Prohibition on refund of contribution and on accrual of interest on contribution

 (1) A contribution paid by a shareholder shall not be refunded, nor shall any interest be paid on a contribution.

 (2) Payment of the purchase price by the public limited company upon repurchase of its own shares shall be deemed not to be a refund of contribution.

§ 275. Consequences of delay of contribution

 (1) A shareholder who fails to pay for the shareholder's share on time is required to pay a fine on delay in the amount provided by law to the private limited company unless otherwise provided by the articles of association. The above does not preclude or restrict the right to file a claim for compensation of damages exceeding the amount of the fine for delay.

 (2) The management board shall send a notice to a shareholder who delays in payment demanding payment during the term specified in the letter, indicating that the shareholder shall lose the shareholder’s share if payment is not made. The term for payment shall be at least fifteen days after the notice is sent.

 (3) If the shareholder does not pay the deficient sum during the term specified in the notice, the shareholder shall lose the shareholder’s share and the public limited company has the right to transfer it to other shareholders or third persons. A sum paid by the shareholder which does not exceed one-fifth of the nominal value or book value of the share shall be transferred to the legal reserve, and the remainder of the sum shall be refunded to the shareholder.

§ 276. Payment to shareholders

 (1) A public limited company may only make payments to shareholders from net profit or from undistributed profit from previous financial years from which uncovered losses from previous years have been deducted, pursuant to law.

 (2) A shareholder shall be paid a share of profit (dividend) according to the nominal value or book value of the shareholder’s shares. The articles of association may prescribe different rights attaching to different classes of shares with regard to distribution of profit.

§ 277. Procedure for payment of dividends

 (1) Dividends may be paid on the basis of the approved annual report.

 (2) The procedure for payment of dividends shall be prescribed in the articles of association or by a resolution of the general meeting.

 (3) The articles of association may give the management board of a public limited company the right to make advance payments to the shareholders with the consent of the supervisory board after the end of a financial year and before approval of the annual report on account of the presumed profit in the amount of up to one half of the amount subject to distribution among the shareholders.

§ 278. Amount of dividend

  The amount of a dividend shall be approved by the general meeting. The management board shall present a proposal concorded with the supervisory board. Payments shall not be made to shareholders if the net assets of the public limited company, as apparent from the annual report approved at the end of the previous financial year of the public limited company, are less than or would be less than the total of share capital and reserves which pursuant to law or the articles of association shall not be paid out to shareholders.

§ 279. Payment of dividend

 (1) A shareholder has the right to demand payment of a dividend prescribed by a resolution of the general meeting.

 (2) The dividend shall be paid in money. Upon the consent of the shareholder, the dividend may also be paid in other property.

§ 280. Return of illegal dividend

 (1) If a shareholder is made a payment which the shareholder does not have a right to receive, the shareholder shall return the payment which is received without basis.

 (2) If upon receipt of the payment, the shareholder did not know nor should have known that it was paid to the shareholder without basis, return of the payment may be demanded only if it is necessary for satisfying the claims of the creditors of the public limited company.

 (3) A claim for return of the payment specified in subsection (1) of this section may also be submitted by a creditor of the public limited company if the assets of the public limited company are not sufficient to satisfy the claims of the creditor. In the course of bankruptcy proceedings of a public limited company, only a trustee in bankruptcy may file a claim on behalf of the public limited company.

 (4) An agreement which derogates from the provisions of subsections (1)–(3) of this section shall only be valid with respect to the creditors and trustees in bankruptcy of a public limited company if such agreement was entered into in the course of bankruptcy proceedings of the public limited company. Set-off of claims is prohibited.

 (5) The claims specified in subsections (1)–(3) of this section expire after five years of payment of the dividends.

 (6) The members of the management board and supervisory board who caused the making of the unlawful payment shall be liable for the return of the payment solidarily with the shareholder who received such payment.

§ 281. Prohibited loans

 (1) A public limited company shall not grant a loan:
 1) to one of its shareholders whose shares represent more than 1 per cent of the share capital;
 2) to a shareholder or member of its parent undertaking, whose shares represent more than 1 per cent of the share capital of the parent undertaking;
 3) to a person to acquire shares of the public limited company;
 4) to a member of its management board or supervisory board or its procurator.

 (2) [Repealed - RT I 2000, 29, 172 - entry into force 17.04.2000]

 (21) A subsidiary may grant a loan to its parent undertaking or to a shareholder of the parent undertaking or to a member who forms the same group as the subsidiary if this does not harm the financial status of the public limited company or the interests of creditors. A subsidiary shall not grant a loan for acquiring a share of the public limited company to the persons specified in the first sentence of this subsection.

 (3) A public limited company shall also not guarantee a loan taken by the persons specified in subsection (1) of this section. The prohibition does not apply to guaranteeing a loan taken by the parent undertaking or guaranteeing a loan taken by a shareholder or member of the parent undertaking who forms the same group as the subsidiary if this does not harm the financial status of the public limited company or the interests of creditors. A public limited company shall not guarantee a loan taken for acquisition of a share of the public limited company.

 (4) Transactions in violation of the provisions of subsections (1) and (21) of this section are void. Violation of the provisions of subsection (3) of this section does not result in the nullity of the transaction but the person whose loan was secured must compensate the damage caused to the public limited company by the provision of the security.

 (5) The provisions of subsections (1)–(4) of this section correspondingly apply to credit agreements and other economically equivalent transactions.

§ 282. Subscription for own shares

 (1) A public limited company shall not itself or through a third person acting at the expense of the public limited company subscribe for its own shares.

 (2) A subsidiary shall not subscribe for shares of its parent undertaking.

§ 283. Acquisition or taking as security of own shares

 (1) A public limited company shall not itself or through a third person acting in its own name but at the expense of the public limited company acquire or take as security its own shares unless otherwise provided by law.

 (2) The acquisition or taking as security of its own shares by a public limited company shall be permitted if:
 1) this occurs within five years after adoption of a resolution of the general meeting which specifies the terms and conditions and term for the acquisition or taking as security of shares and the minimum and maximum amounts to be paid for the shares;
 2) the sum of the nominal values or book values of the shares held or taken as security by the public limited company does not exceed one-tenth of the share capital; and
 3) acquisition of the shares does not cause the net assets to become less than the total of share capital and reserves which pursuant to law or the articles of association shall not be paid out to shareholders.

 (3) The public limited company may acquire its own shares by a resolution of the supervisory board without a resolution of the general meeting if the acquisition of shares is necessary to prevent significant damage to the public limited company. The shareholders shall be informed of the circumstances surrounding and the details of the acquisition of shares at the next general meeting of shareholders.

 (4) A public limited company may acquire its own shares without the restrictions provided for in subsection (2) of this section if the shares are acquired by succession.

 (5) A public limited company’s own shares shall not grant the public limited company any rights of a shareholder.

 (6) In the course of ongoing transactions, a credit institution or another professional securities market participant is permitted to take as security own shares to the extent of up to one tenth of the share capital.

 (7) A transaction constituting an obligation which is in conflict with the provisions of subsections (1), (2) or (6) of this section is void. The above does not affect the validity of the acquisition of a share or taking of a share as security.

§ 284. Transfer of own shares

 (1) [Repealed - RT I 2008, 16, 116 - entry into force 15.04.2008]

 (2) If a public limited company has acquired or taken as security its own shares based on subsection 283 (4) of this Code, and the total of the nominal values or book values thereof, including the sum total of the nominal values or book values of the own shares belonging to or taken as security by the public limited company is higher than 1/10 of the share capital, then the shares acquired or taken as security in such manner which exceed the 1/10 shall be transferred or taking them as security shall be terminated within three years after the transfer or taking as security.

 (3) If a public limited company acquires or takes as security its own shares illegally, the shares shall be transferred or the taking as security shall be terminated within one year after the acquisition or taking as security.

 (4) If the shares are not transferred or the taking as security is not terminated during the term specified in subsections (2) or (3) of this section, the shares shall be cancelled and the share capital reduced accordingly.

§ 285. Mutual acquisition of shares

  A subsidiary may acquire or take as security shares of its parent undertaking on the same terms and conditions as its own shares. If a subsidiary acquires or takes as security shares of its parent undertaking, it shall be deemed, for the purposes of this Code, that the parent undertaking has acquired such shares or taken such shares as security.

§ 286. Jointly held share

 (1) If a share is held by several persons jointly, these persons may only exercise the rights attaching to the share jointly. The above does not apply to a private limited company if the private limited company has not been informed of the common ownership of the share.

 (2) The common owners of a share shall be solidarily liable for the obligations attaching to the share.

 (3) A common owner of a share has the right to demand the entry of the owner in the share register.

 (4) If the shareholders have not appointed a common representative for performance of the rights arising from the share, a transaction performed by the public limited company with respect to the joint owners is deemed to be valid even if such act was performed with respect to only one shareholder or some of the shareholders.

§ 287. Right of shareholder to information

 (1) A shareholder has the right to receive information on the activities of the public limited company from the management board at the general meeting.

 (2) The management board may refuse to give information if there is a basis to presume that this may cause significant damage to the interests of the public limited company.

 (3) If the management board refuses to give information, the shareholder may demand that the general meeting decide on the legality of the shareholder's request or to file, within two weeks after the general meeting, a petition to a court by way of proceedings on petition in order to obligate the management board to give information.

§ 288. 

§ 289. Liability of shareholder

 (1) A shareholder shall be liable for any damage wrongfully caused to the public limited company, another shareholder or third persons, in the capacity of shareholder.

 (2) A shareholder shall not be liable for any damage caused if the shareholder did not participate in the adoption of the resolution of the general meeting which was the basis for the cause of damage or if the shareholder voted against the resolution.
[RT I 2002, 53, 336 - entry into force 01.07.2002]

§ 2891. Public limited company with one shareholder

 (1) If all the shares in a public limited company belong to one single shareholder or if, in addition to the single shareholder, the shares of the public limited company are owned only by the private limited company itself, the management board shall immediately submit a corresponding written notice to the registrar of the commercial register. The notice shall set out the name, address and personal identification code or registry code of the single shareholder. The notice shall be preserved in the business file.

 (2) The members of the management board shall be solidarily liable for damage caused by violation of the notification requirement provided for in subsection (1) of this section.

§ 2892. Liability for damaging public limited company by influencing activity of public limited company

 (1) A person who, by misusing his or her influence, influences a member of the management board or supervisory board to act contrary to the interests of the public limited company, is liable to compensate any damage incurred thereby to the public limited company.

 (2) In the event specified in subsection (1) of this section, a member of the management board or supervisory board who violated his or her obligations shall be solidarily liable with the person who influenced him or her unless he or she proves that he or she has performed his or her obligations with due diligence.

 (3) In the case specified in subsection (1) of this section, the persons who derived gains from such damage shall also be held liable solidarily with the person who misused his or her influence.

 (4) The limitation period for the claims specified in subsections (1)–(3) of this section is five years

 (5) A claim for payment of compensation for the damage specified in subsection (1)–(3) of this section to a public limited company may also be submitted by a creditor of the public limited company if the assets of the public limited company are not sufficient to satisfy the claims of the creditor. In the case of declaration of bankruptcy of a public limited company, only a trustee in bankruptcy may file a claim on behalf of the public limited company.

 (6) A creditor or trustee in bankruptcy has the right to file the claim specified in subsection (5) of this section also if the public limited company has waived the claim or has entered into a contract of compromise with such member or resulting from an agreement, has limited the claim or filing thereof in another manner or reduced the limitation period.

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