Estonia Commercial Code - Takeover

Chapter 29 TAKEOVER OF SHARES FOR MONETARY COMPENSATION  

§ 3631. Application for takeover of shares

 (1) On the application of a shareholder whose shares represent at least 9/10 of the share capital of a public limited company (majority shareholder), the general meeting of shareholders may decide in favour of the shares belonging to the remaining shareholders of the public limited company (minority shareholders) being taken over by the majority shareholder in return for fair monetary compensation.

 (2) Upon determination of the size of the share capital represented by the shares of the majority shareholder, own shares of the public limited company shall not be taken into account. The shares of the majority shareholder within the meaning of subsection (1) of this section are also deemed to include the shares of its parent undertaking or subsidiary, provided the parent undertaking or subsidiary has granted its consent to this effect.

 (3) The application specified in subsection (1) of this section shall be submitted to the management board of the public limited company. The documents specified in § 3634 of this Code shall be appended to the application. The management board is required to call a general meeting to decide on the takeover of shares.

 (4) The application specified in subsection (1) of this section may not be withdrawn and its conditions may not be amended to the disadvantage of minority shareholders.

§ 3632. Determination of amount of compensation

 (1) The majority shareholder shall determine the amount of compensation payable to minority shareholders. The amount of compensation shall be determined on the basis of the value of the shares to be taken over that these shares had ten days prior to the date on which the notice calling the general meeting was sent out. The management board shall provide the majority shareholder with all the necessary data and documents therefor and with information.

 (2) [Repealed - RT I 2007, 58, 380 - entry into force 19.11.2007]

§ 3633. Notice calling general meeting

  The notice calling the general meeting at which a decision is to be made regarding the takeover of shares belonging to minority shareholders shall, in addition to the information specified in subsection 294 (4) of this Code, also set out:
 1) the name, residence or registered office and address thereof, and the personal identification code or registry code of the majority shareholder;
 2) the amount of compensation to be paid to minority shareholders per share.

 (3) [Repealed - RT I 2009, 51, 349 - entry into force 15.11.2009]

§ 3634. Takeover report, audit

 (1) The majority shareholder shall submit a written report (takeover report) to the general meeting explaining and justifying the conditions of taking over shares belonging to minority shareholders and the bases for determining the amount of compensation payable for the shares.

 (2) The takeover report shall be audited by an auditor. The auditor shall prepare a written report of the audit, stating in particular whether the amount of compensation determined by the majority shareholder meets the provisions of § 3632 of this Code.
[RT I 2007, 58, 380 - entry into force 19.11.2007]

 (21) Additionally, the auditor's report shall set out the method which was used upon determination of the amount of compensation, the difficulties relating to determination of the amount of compensation, whether the used method is appropriate for determination of the amount of compensation and other methods for determination of the compensation. If different methods are used upon determination of the amount of compensation, the amount of compensation in each method and the importance of results obtained on the basis of each method upon determination of the amount of compensation shall be set out.

 (3) The majority shareholder shall appoint the auditor and cover the costs of the audit.

 (4) The auditor shall be liable for any damage wrongfully caused by an inaccurate audit of the takeover report.

§ 3635. Preparation of general meeting

 (1) At least one month before a general meeting to decide on the takeover of shares belonging to minority shareholders, the management board shall present the following to the shareholders for examination at the location of the public limited company:
 1) the draft resolution of the general meeting to decide on the takeover of shares belonging to minority shareholders;
[RT I 2009, 51, 349 - entry into force 15.11.2009]
 2) the three preceding annual reports of the public limited company;
 3) the takeover report;
 4) the auditor's report.

 (11) Clause 294 (4) 8) and subsection 294 (42) of this Code shall respectively apply to making the documents specified in subsection (1) of this section available.
[RT I 2009, 51, 349 - entry into force 15.11.2009]

 (2) Copies of the documents specified in subsection (1) of this section shall be promptly given to a shareholder on the demand of the shareholder. Clause 294 (4) 8) and subsection 294 (42) of this Code shall respectively apply to making the documents specified in the previous sentence available.
[RT I 2009, 51, 349 - entry into force 15.11.2009]

§ 3636. Organisation of general meeting

  The majority shareholder is required to explain to the minority shareholders at the general meeting the conditions of taking over the shares belonging to the minority shareholders and the bases for determining the amount of compensation payable for the shares.

§ 3637. Resolution of general meeting

 (1) A resolution on the takeover of shares belonging to minority shareholders shall be adopted if at least 95/100 of the votes represented by shares are in favour.

 (2) The minutes of a general meeting at which a resolution is adopted on the takeover of shares belonging to minority shareholders shall be attested by a notary.

§ 3638. Contestation of takeover resolution

 (1) At the request of a shareholder, a court may declare a takeover resolution which is in conflict with law to be invalid if the request is submitted within one month as of the resolution being made.

 (2) A takeover resolution shall not be declared invalid on the basis that the compensation payable to minority shareholders is set too low.

 (3) If the compensation payable to minority shareholders is set too low, the court may, on the request of a minority shareholder, determine a fair rate of compensation.

 (4) [Repealed - RT I 2007, 58, 380 - entry into force 19.11.2007]

 (5) As of the adoption of the takeover resolution, the majority shareholder shall pay a fine for delay on unpaid compensation in the amount established by law.

§ 3639. Transfer of shares

 (1) Within one month as of the adoption of the resolution of the general meeting specified in § 3637 of this Code, the management board of the public limited company shall submit an application to the registrar of the Estonian Central Register of Securities for the shares of minority shareholders to be transferred to the majority shareholder. A notarised copy of the resolution of the general meeting specified in § 3637 of this Code shall be appended to the application.

 (2) The registrar of the Estonian Central Register of Securities shall arrange for the transfer of the shares to the account of the majority shareholder on the basis of an application specified in subsection (1) of this section against payment the size of which corresponds to the compensation payable for the shares.

§ 36310. Forwarding of takeover resolution to commercial register

  The management board of the public limited company shall submit the notice specified in § 2891 of this Code to the registrar of the commercial register immediately after transfer of the shares to the account of the majority shareholder. The following shall be appended to the notice:
 1) a notarised copy of the resolution of the general meeting specified in § 3637 of this Code;
 2) the takeover report;
 3) the auditor's report provided for in subsection 3634 (2) of this Code;
 4) a statement issued by the registrar of the Estonian Central Register of Securities regarding the transfer of the shares.

Chapter 30 DISSOLUTION OF PUBLIC LIMITED COMPANY  

§ 364. Bases for dissolution of public limited company

  A public limited company shall be dissolved:
 1) by a resolution of the general meeting;
 2) by a court decision;
 21) by declaration of bankruptcy of the public limited company;
 22) by abatement of the bankruptcy proceeding of the public limited company before declaration of bankruptcy;
 3) [Omitted - RT I 1996, 40, 773 - entry into force 08.06.1996]
 4) on other bases prescribed by law or the articles of association.

§ 365. Resolution on dissolution of public limited company at general meeting

 (1) A dissolution resolution shall be adopted if at least two-thirds of the votes represented at the general meeting are in favour unless the articles of association prescribe a greater majority requirement. If a public limited company has several classes of shares, in order to adopt a dissolution resolution it shall also be necessary that at least two-thirds of the votes represented by shares of each class are in favour of the resolution unless the articles of association prescribe a greater majority requirement.

 (2) If dissolution of the public limited company is decided by a special general meeting, the management board shall present the preceding annual report, approved by the general meeting, and an overview of the economic activities of the public limited company for the current year to the special general meeting. Clause 294 (4) 8) and subsection 294 (42) of this Code shall respectively apply to making the documents specified in the previous sentence available.
[RT I 2009, 51, 349 - entry into force 15.11.2009]

 (3) The overview of economic activities shall indicate the term during which the public limited company is able to satisfy the claims of creditors.

§ 366. Compulsory dissolution

 (1) A public limited company shall be dissolved by a court ruling if:
 1) the general meeting does not adopt a dissolution resolution if its adoption is obligatory pursuant to law or the articles of association, the shareholders have not adopted any of the resolutions prescribed in § 301 or the general meeting has not been called to adopt such a resolution;
 2) the general meeting has not been held during the last two financial years;
 3) the term of office of the management board expired more than two years previously and a new management board has not been elected;
 4) in other cases provided by law.

 (2) A petition for the compulsory dissolution of a public limited company may be submitted by the management board, the supervisory board, a member of the management board, a shareholder or other persons specified by law. Unless otherwise provided by law, a court may also decide on compulsory dissolution at its own initiative.

 (3) If the deficiency or other circumstance that provides the basis for compulsory dissolution can be evidently eliminated, the court shall previously establish a term for the public limited company for the elimination of the deficiency or circumstance.

§ 367. Petition for dissolution of public limited company

 (1) The management board shall submit a petition for entry of the dissolution resolution of the public limited company in the commercial register. The resolution of the general meeting and the minutes of the general meeting shall be appended to the petition.

 (2) If a public limited company is dissolved on the basis of a court decision, the court shall send the decision to the commercial register for entry.

 (3) A public limited company is deemed to be dissolved as of the making of the entry on dissolution in the commercial register. Compulsory dissolution enters into force as of the entry into force of the court decision.

§ 368. Liquidation

  A public limited company shall be liquidated (liquidation proceeding) upon dissolution unless otherwise provided by law.

§ 369. Appointment of liquidators

 (1) The liquidators of a public limited company shall be members of the management board unless the articles of association, a resolution of the general meeting or a court ruling prescribes otherwise. A natural person who is prohibited from acting as a member of the management board shall not be a liquidator.

 (2) The residence of at least one liquidator must be in Estonia.

 (3) A court shall appoint the liquidators in a compulsory dissolution or if this is requested by shareholders whose shares represent at least one-tenth of the share capital. The court shall also specify the procedure for and amount of remuneration for the liquidators.

§ 370. Removal of liquidators

 (1) A liquidator who is a member of the management board, or who has been appointed in accordance with the articles of association or by a resolution of the general meeting can be recalled at any time by a resolution of the general meeting. In order to adopt such resolution, a majority of votes equal to the majority of votes necessary for appointment of a liquidator is needed.

 (2) A court may recall a liquidator appointed by the court, and to appoint a new liquidator. Based on the demand of the shareholders whose shares represent at least one tenth of the share capital, a court may also recall, for a good reason, a liquidator who is a member of the management board, or who has been appointed in accordance with the articles of association or by a resolution of the general meeting, and to appoint a new liquidator.

 (3) A liquidator may resign for the same reasons and pursuant to the same procedure as a member of the management board.

§ 371. Entry of liquidator

 (1) The management board shall submit a petition for entry of the first liquidators in the commercial register. A petition for entry in the commercial register of a change of liquidator or the right of representation of a liquidator shall be submitted by the liquidators. The resolution which constitutes the basis for the change of a liquidator or the right of representation of a liquidator shall be appended to the petition. All liquidators shall submit to the registrar a written confirmation concerning their right pursuant to law to act as liquidators.

 (2) If a liquidator is appointed by a court decision, the court shall send the decision to the commercial register for entry.

 (3) The names and personal identification codes of the liquidators shall be entered in the commercial register.

§ 372. Rights and obligations of liquidators

 (1) Liquidators have the rights and obligations of the management board which are not contrary to the objective of the liquidation. Liquidation does not affect the legal relationships between the shareholders or between the shareholders and the public limited company, or the rights of the supervisory board, unless otherwise provided by law and the nature of liquidation.

 (2) The liquidators shall terminate the activities of the public limited company, collect debts, sell assets and satisfy the claims of creditors.

 (3) The liquidators may only conclude transactions which are necessary for liquidation of the public limited company. The right of representation of liquidators is unrestricted with regard to third persons.

 (4) The right of representation of liquidators who are members of the management board does not change upon liquidation unless the articles of association, a resolution of the general meeting or a court decision prescribes the changing of the right of representation into joint representation or sole representation. Liquidators appointed by a resolution of the general meeting or a court decision may represent the private limited company only jointly, unless the resolution of the general meeting or a court decision prescribe that all or some of the liquidators may represent the public limited company alone or together. A division of the right of representation which differs from the right of representation prescribed by law applies with respect to third persons only if it has been entered in the commercial register.

 (5) During a liquidation proceeding, the notation “likvideerimisel” [in liquidation] shall be appended to the business name of the public limited company.

§ 373. Submission of bankruptcy petition

  If the assets of a public limited company being liquidated are insufficient for satisfaction of all claims of creditors, the liquidators shall submit a bankruptcy petition.

§ 374. Accounting during liquidation

 (1) A public limited company undergoing liquidation shall organise its accounting pursuant to the procedure provided by the Accounting Act unless otherwise provided by the law or the nature of liquidation.

 (2) Within three months after the date of the dissolution resolution, the liquidators shall prepare, taking account of the provisions concerning the balance sheet contained in the annual report, the opening balance sheet of the liquidation and a report explaining such balance sheet which shall contain the information subject to inclusion in the annexes of the annual accounts.

 (3) With the passing of the dissolution resolution, the current financial year of the public limited company shall end and a new financial year shall begin. The liquidators shall prepare the annual accounts of the public limited company as at the end of the financial year which ends at the time of dissolution of the public limited company and as at the end of every financial year following dissolution.

 (4) The general meeting of shareholders shall approve the opening balance sheet of the liquidation and the annual report by a resolution. After approval, the opening balance sheet of the liquidation and the annual report shall be immediately submitted to the commercial register.

 (5) A court may release a public limited company from the obligation to audit the opening balance sheet of the liquidation and the annual report if the financial situation of the public limited company is sufficiently clear and auditing is evidently not necessary in the interests of the shareholders and creditors.

§ 375. Notification of creditors

 (1) The liquidators shall promptly publish a notice of the liquidation proceeding of the public limited company in the official publication Ametlikud Teadaanded.

 (2) The liquidators shall send a notice of liquidation to the known creditors.

 (3) The notice of liquidation shall indicate that creditors are to submit their claims within four months after publication of the notice.

§ 376. Submission of claims

  The creditors shall notify the liquidators of all their claims against the public limited company within four months after publication of the notice. The notice shall set out the content, basis and amount of the claim, and documents substantiating the claim shall be appended thereto. Failure to notify of a claim on time does not affect the validity of the claim or restrict the right of the creditor to file an action with a court against the public limited company being liquidated.

§ 377. Satisfaction of claims

 (1) Liquidators shall satisfy the claims of creditors of which the public limited company is aware regardless of whether or not notification of such claims has been given.

 (2) If a creditor known to the public limited company has not filed a claim and the claim cannot be satisfied for reasons independent of the public limited company, the money which belongs to the creditor shall be deposited if the conditions for depositing exist.

 (3) If an obligation cannot be performed during liquidation or if a claim is under dispute, the assets of the public limited company cannot be distributed between the shareholders unless the contested amount of money has been deposited and the creditor has been granted sufficient security.

§ 378. Final balance sheet

 (1) After satisfaction of the claims of all creditors and the deposit of money, the liquidators shall prepare the final balance sheet and distribution plan for the assets remaining upon liquidation.

 (2) An auditor shall audit the final balance sheet and asset distribution plan.

 (3) The liquidators shall present the final balance sheet and asset distribution plan to all shareholders for examination at the registered office of the public limited company and shall notify the shareholders who hold registered shares thereof. If the public limited company has bearer shares, the liquidators shall publish a notice in a newspaper concerning the examination of the balance sheet and asset distribution plan.

 (4) If the provisions of law or of the articles of association, or the resolutions of the general meeting are not observed in the preparation of a balance sheet or asset distribution plan, a court may, based on an action by the shareholders whose shares represent at least one tenth of the share capital, order preparation of a new balance sheet or asset distribution plan, or supplementary liquidation. Such action may be filed within two months after the date on which the shareholders were informed that the balance sheet and asset distribution plan are presented to the shareholders for examination. The public limited party is the defendant.

§ 379. Distribution of assets

 (1) After satisfying or guaranteeing all the creditors' claims and depositing the money, the remaining assets shall be distributed among the shareholders according to the nominal value or book value of their shares pursuant to the asset distribution plan prepared by the liquidators unless the articles of association prescribe otherwise.

 (2) Assets may be distributed within six months after the entry of the dissolution of the public limited company in the commercial register and within two months after the date on which the shareholders were informed that the final balance sheet and asset distribution plan are presented to the shareholders for examination, except in the case where the balance sheet or asset distribution plan have been contested in court, the action has not been heard or has not been satisfied, or if the proceeding in the matter has been concluded.

 (3) A court may allow payments to shareholders within six months after publication of the notice of liquidation unless this damages the interests of the creditors.

 (4) Payments shall be made in money unless the articles of association prescribe otherwise.

 (5) The liquidators need not sell assets unless this is necessary for satisfaction of the claims of creditors, and if the general meeting consents thereto.

§ 380. Continuation of activities of dissolved public limited company

 (1) If dissolution of a public limited company is prescribed by the articles of association or is decided by a resolution of the general meeting, the general meeting may, until commencement of the distribution of assets among the shareholders, decide on continuation of the activities of the public limited company or on merger, division or transformation of the public limited company. A resolution on continuation of activities shall be adopted if at least two-thirds of the votes represented at the general meeting are in favour.
[RT I 2009, 51, 349 - entry into force 15.11.2009]

 (2) If continuation of activities is decided, the same resolution shall designate the new supervisory board and management board, and shall reduce the share capital to the value of the remaining assets. If the assets have decreased below the amount of share capital specified in § 222 of this Code, increase of share capital shall also be decided.

 (3) The liquidators shall submit a petition for entry of the continuation of activities in the commercial register. The resolution on continuation shall enter into force as of its entry in the commercial register.

§ 381. Deletion from commercial register and supplementary liquidation

 (1) Liquidators shall submit a petition for deletion of a public limited company from the commercial register after the conclusion of the liquidation, however not earlier than six months after the entry of the liquidation of the public limited company in the commercial register and publication of the liquidation notice and after three months of the date on which the shareholders were informed that the final balance sheet and asset distribution plan are presented to the shareholders for examination, provided that the public limited company is not a party to any court proceedings currently conducted in Estonia. The final balance sheet and asset distribution plan shall be appended to the petition. The petition shall include a confirmation by all the liquidators that the final balance sheet and asset distribution plan have not been contested in court, or the action has been not been heard or has not been satisfied, or that the proceeding in the matter has been terminated and the claims of the creditors of the public limited company have been satisfied or that the assets necessary to satisfy the claims have been deposited and that the public limited company is not a party to any court proceedings currently conducted in Estonia.

 (2) If, after the public limited company has been deleted from the register, it becomes evident that the public limited company has assets which were not distributed and that supplementary liquidation measures are necessary, a court may, at the request of an interested person, order a supplementary liquidation and restore the rights of the former liquidators or appoint new liquidators.

 (3) After a public limited company has been deleted from the register, liquidation may be carried out at the demand of a creditor only in the case where the creditor proves that the creditor's claim against the public limited company was not satisfied in the liquidation proceeding, that the creditor has no other possibility for the satisfaction of the claim and that, upon restoration of the liquidation proceeding, the claim could be satisfied, or that the public limited company should not have been deleted from the register because a dispute over the claim existed. Among other, a creditor's demand for supplementary liquidation shall not be satisfied if the creditor has failed, without good reason, to submit the creditor's claim to the liquidators on time.

§ 382. Preservation of documents

 (1) The liquidators shall deposit the documents of a public limited company with a liquidator, a person maintaining an archive or another trustworthy person. If the liquidators have not appointed a depositary of documents, a court shall appoint one as necessary.

 (2) The name, residence or registered office, and personal identification code or registry code of the depositary of documents shall be entered in the commercial register on the petition of the liquidators or, in the case of a court-appointed depositary, on the basis of the court ruling. The depositary of documents shall be exchanged and a new depositary shall be appointed based on a court ruling.

 (3) The depositary of documents shall be responsible for the preservation, during the term prescribed for by law, of the documents deposited with the depositary.

 (4) Shareholders and their legal successors have the right to examine the deposited documents. The creditors of the public limited company and persons with a legitimate interest in the matter may examine the documents with the permission of the court.

§ 383. Liability of liquidators

  The liquidators shall be liable in the same manner as members of the management board for any damage caused.

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