Estonia Commercial Code - General Provisons

Chapter 32 DIVISION  

Division 1 General Provisions  

§ 434. Methods of division

 (1) Division shall be effected without a liquidation proceeding by distribution or separation.

 (2) Upon distribution, the company being divided shall transfer its assets to the recipient companies. A recipient company may be an existing or new company. Upon distribution, the company being divided shall be deemed to be dissolved.

 (3) Upon distribution, the partners or shareholders of the company being divided shall become partners or shareholders of a recipient company.

 (4) Upon separation, the company being divided shall transfer part of its assets to one or several recipient companies. A recipient company may be an existing or new company.

 (5) Upon separation, the partners or shareholders of the company being divided shall become partners or shareholders of a recipient company, or the company being divided shall become the sole shareholder.

 (6) Existing and new companies entered in the commercial register in Estonia may simultaneously be recipient companies.

 (7) Companies participating in a division may be of the same class or of different classes of companies unless otherwise provided by law.

§ 435. Division agreement

 (1) In order to divide, the management boards of or the partners entitled to represent the companies participating in division shall conclude a division agreement. Rights and obligations shall arise from the division agreement after approval of the agreement pursuant to the procedure provided for in § 440 of this Code. A division agreement shall set out:
 1) the business names and registered offices of the companies participating in division;
 2) upon distribution or separation, the distribution and exchange ratio of shares in the companies participating in the division to be transferred to the partners or shareholders of the company being divided, and the amount of additional payments, if additional payments are to be made, for the exchange of shares to the partners or shareholders of the company being divided;
 3) upon distribution or separation, the terms and conditions of transfer of the shares of the recipient companies for the exchange of shares with the partners or shareholders of the company being divided;
 4) the date as of which the transferred shares shall grant the right to a share of profit of the recipient companies and the special conditions affecting this right;
 5) the rights which the recipient companies will grant to the partners or shareholders of the company being divided, including the holders of preferred shares and convertible bonds;
 6) a list of assets to be transferred to each recipient company and the distribution of obligations which belong to the assets among the companies participating in division;
 7) the consequences of division for the employees;
 8) in the case of distribution, the date as of which the transactions of the company being divided shall be deemed to be undertaken by the recipient company (division balance sheet date);
 9) the remuneration paid to the auditor who audits the division agreement and the advantages granted to the members of the management boards and supervisory boards of the companies participating in division or the partners entitled to represent the companies.

 (2) The sum of additional payments prescribed in a division agreement which are to be paid by a recipient private limited company or public limited company to the partners or shareholders of the company being divided shall not exceed one-tenth of the sum of the nominal values or book values of their exchanged shares.

 (3) A division agreement shall be notarised.

 (4) If an approved division agreement is conditional and a condition is not met within five years after conclusion of the agreement, a company may terminate the agreement by giving at least six months’ advance notice of termination unless the division agreement prescribes a shorter term for advance notice.

§ 436. Division report

 (1) The management boards of or the partners entitled to represent the companies participating in a division shall prepare a written report (division report) in which the division and division agreement shall be explained and justified legally and economically. Upon distribution or separation whereby shares are exchanged with the partners or shareholders of the company being divided, the share exchange ratio, the distribution of shares of the companies participating in the division among the partners or shareholders of the company being divided, and the amount of additional payments, if additional payments are to be made, shall be justified in the report. Difficulties relating to valuation shall be referred to separately in the report.

 (2) A division report need not be prepared upon separation by an exchange of shares with the company being divided, or if this is agreed to by all the partners of the company participating in division or all the shareholders of the public limited companies participating in division.

 (3) The companies participating in division may prepare a joint division report.

 (4) If a company participating in division belongs to a group, the division report shall also set out information necessary for the division concerning the other companies belonging to the group.

 (5) A division report need not set out information, publication of which may result in significant damage to a company participating in division or a company belonging to the same group with such company. In such case, the reason for failure to submit the information shall be set out in the report.

§ 437. Audit

 (1) An auditor shall audit a division agreement in the cases provided by law.

 (2) An auditor need not audit a division agreement upon separation by the exchange of shares with the company being divided, or if all the partners of the company participating in division or all the shareholders of the public limited companies participating in division agree that an auditor need not audit the division agreement.

§ 438. Appointment of auditor

  An auditor shall be appointed by the management board or managing partners of the company participating in a division. One auditor may be appointed for some or all of the companies participating in division.

§ 439. Report and liability of auditor

 (1) The auditor shall prepare a written report concerning the results of the audit of a division agreement. The auditors who audit a division agreement may prepare a joint report for the companies.

 (2) A report shall indicate whether the share exchange ratio and additional payments indicated in the division agreement are appropriate consideration for the partners or shareholders of the company being divided, and whether the division may bring about damage to the interests of the creditors of the company.

 (21) Additionally, the auditor's report shall set out the method which was used upon determination of the exchange ratio of shares to be transferred to the partners or shareholders of the company being divided, the difficulties relating to determination of the exchange ratio, whether the used method is appropriate for determination of the exchange ratio and other methods for determination of the exchange ratio. If different methods are used upon determination of the exchange ratio, the exchange ratio in each method and the importance of results obtained on the basis of each method upon determination of the exchange ratio shall be set out.

 (3) An auditor shall be liable, in the same manner as upon auditing an annual report, for the damage caused by inaccurate auditing of the division contract to the company, its shareholders or creditors.

 (4) An auditor has the same rights and obligations upon auditing a division contract as upon auditing an annual report. An auditor also has the right to obtain information necessary for auditing from other companies which belong to the same group with the company participating in division.

 (5) An auditor's report need not set out information, publication of which may result in significant damage to a company participating in division or a company belonging to the same group with such company. In such case, the reason for failure to submit the information shall be set out in the report.

§ 440. Division resolution

 (1) Rights and obligations shall arise from a division agreement if the division agreement is approved by all companies participating in the division. A division resolution shall be in writing.

 (2) A partner or shareholder may demand a copy of the division agreement or resolution.

 (3) The partners or shareholders shall be provided with the opportunity to examine the division agreement, division report and auditor’s report at least two weeks before deciding on approval of the division agreement unless otherwise provided by law.

 (4) All the partners or shareholders of a company being divided must be in favour of the division resolution if, in the companies participating in division, shares are to be determined between the partners or shareholders of the company being divided based on a different proportion than in the company being divided.

 (5) The management board of or the partners entitled to represent the company participating in division, prior to deciding on the approval of the division agreement, shall notify the partners or the general meeting of all material changes in the assets of the company which occur in the interim between the entry into the division agreement and deciding on the approval of the division agreement. The management board of or the partners entitled to represent the company participating in division shall notify of the changes specified in the previous sentence also the management boards of or the partners entitled to represent the other companies participating in division, who shall notify of the above changes the partners or the general meeting of their companies.

 (6) The obligations specified in subsection (5) of this section need not be performed upon separation by an exchange of shares with the company being divided, or if this is agreed to by all the partners or shareholders of the companies participating in division.

§ 441. Contestation of division resolution and compensation for damage

 (1) On the petition of a partner, shareholder or member of the management board or supervisory board, a court may declare invalid a division resolution which is in conflict with the law, the partnership agreement or the articles of association if the request is submitted within one month after the resolution is made.

 (2) The division resolution of a company being divided shall not be declared invalid on the basis that the share exchange ratio is fixed too low.

 (3) If the share exchange ratio is fixed too low, a partner or shareholder may demand a refund from the recipient company which may exceed the amount specified in subsection 435 (2) of this Code.

 (4) A fine for delay shall be paid on an unpaid refund in the amount provided by law as of entry of the division in the register of the registered office of the company being divided. 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.

§ 442. 

§ 443. Submission of petition to commercial register

 (1) The management board of or the shareholders entitled to represent a company participating in a division shall submit a petition for entry of the division in the commercial register of the registered office of the company not earlier than one month after approval of the division contract. The following shall be appended to the petition:
 1) a notarised copy of the division agreement;
 2) the division resolution;
 3) the minutes of the meeting of partners or shareholders if the division resolution is made at a meeting;
 4) the permission for division, if required;
 5) the division report or the agreements not to prepare one;
 6) the auditor’s report, if required, or the agreements not to prepare one;
 7) upon distribution, the final balance sheet of the company being divided if the company being divided submits the petition;

 (8)
 9) if the shares of a company being divided are registered in the Estonian Central Register of Securities, the confirmation of the registrar of the Estonian Central Register of Securities that the management board of the company being divided has informed the registrar of the division;
[RT I 2006, 55, 407 - entry into force 01.01.2007]
 10) the interim balance sheet or the agreements not to prepare one.

 (2) A registrar may enter a distribution in the register only if the final balance sheet of the company being divided is prepared as at a date not earlier than eight months before submission of the petition to the commercial register. The final balance sheet is prepared pursuant to the requirements established for the balance sheet that constitutes part of the annual report, and the approval of the final balance sheet and conducting the audit thereof is governed by the provisions concerning the approval of the annual report and conducting an audit. The final balance sheet shall be prepared using the same accounting policies and presentation which were used in the preparation of the balance sheet that constitutes part of the last annual report. The final balance sheet shall be prepared as at the day before the division balance sheet.

 (3) In a petition, the members of the management board of or the partners entitled to represent the company shall confirm that the division resolution is not contested, or that a corresponding petition has been denied.

§ 444. Business name of recipient company

 (1) Upon distribution, one recipient company may continue activities under the business name of the company being divided.

 (2) If a partner or shareholder of the company being divided is a natural person who no longer participates in the recipient company, the recipient company may continue to use his or her name in the business name only with the written consent of him or her, or of his or her successors.

§ 445. Division entry

 (1) A division shall be entered in the commercial register of the registered office of the company being divided if it is entered in the commercial registers of the registered offices of all recipient companies. Entries in the commercial registers of the registered offices of the recipient companies shall indicate that the division shall be deemed to be effected as of entry in the commercial register of the registered office of the company being divided.

 (2) The registrar of the commercial register of the registered office of the company being divided shall notify the registrars of the registered offices of the recipient companies of entry of the division in the commercial register and shall send an extract from the commercial register to them. Upon receipt of notification, the registrar shall make a notation in the commercial register regarding when the division was entered in the commercial register of the registered office of the company being divided.

 (3) If the shares of a company being divided are entered in the Estonian Central Register of Securities, the registrar of the registered office of the company being divided shall promptly notify the registrar of the Estonian Central Register of Securities of the receipt of the notice specified in subsection (2) of this section.
[RT I 2006, 55, 407 - entry into force 01.01.2007]

§ 446. Legal effect of entry

 (1) All assets of a company being divided or, upon separation, the separated assets, shall transfer to the recipient companies pursuant to the distribution prescribed in the division agreement as of entry of the division in the commercial register of the registered office of the company being divided. After entry of the division in the commercial register of the registered office of the company being divided, entries regarding the transfer of assets shall be made in registers on the petitions of the recipient companies.

 (2) Upon distribution, the company being divided shall be deemed to be dissolved as of entry of the division in the commercial register of the registered office of the company being divided. The registrar shall delete the company being divided from the commercial register.

 (3) The partners or shareholders of the company being divided shall become partners or shareholders of the companies participating in division pursuant to the division agreement as of entry of the division in the commercial register of the registered office of the company being divided, except if the company being divided, upon separation, becomes the sole shareholder of the recipient company.

 (4) Upon division, the shares of the partners or shareholders of the company being divided shall be exchanged for shares of the recipient companies. The rights of third persons with regard to exchanged shares shall remain valid with regard to the shares of the recipient company.

 (5) The shares held by a recipient company or by the company being divided itself, or by a person acting in his or her own name but at the expense of the company shall not be exchanged upon division and shall become invalid, except if the company being divided, upon separation, becomes the sole shareholder of the recipient company.

 (6) Assets which are not divided upon distribution shall be divided among the recipient companies in proportion to their shares in the divided assets.

 (7) A division shall not be contested after its entry in the commercial register of the registered office of the company being divided.

§ 447. Liability for obligations of company being divided and compensation for damage caused by division

 (1) Companies participating in a division shall be solidarily liable for the obligations of the company being divided which arise before entry of the division in the commercial register of the registered office of the company being divided. In relations between solidary debtors, only persons to whom obligations are assigned by the division agreement are obligated persons.

 (2) A company participating in a division to whom obligations are not designated by the division agreement shall be liable for the obligations of the company being divided if the due date for their performance arrives within five years after entry of the division in the commercial register of the registered office of the company being divided.

 (21) Immediately after a division has been entered in the commercial register of the registered office of the company being divided, the company participating in the division shall publish a division notice to the creditors of the companies being divided in the publication Ametlikud Teadaanded, informing them of the possibility to submit, within six months after the publication of the notice, their claims in order to receive a security.

 (22) The company participating in division must secure the claims of the creditors within six months after the publication of the notice specified in subsection (21) of this section, if the creditors have no possibility to demand satisfaction of the claims and they prove that the division may endanger the fulfilment of the claims.

 (3) The members of the management board and supervisory board, or the managing partners of a company participating in a division shall be solidarily liable to the company, the partners or shareholders, and the creditors of the company for any damage wrongfully caused by the division.

 (4) The limitation period for a claim specified in subsection (3) of this section shall be five years from entry of the division in the commercial register of the registered office of the company being divided.

§ 448. Compensation upon participation of different classes of companies in division

 (1) Upon participation of companies of different classes in a division, a partner or shareholder of the company being divided who opposes the division resolution may, within two months after entry of the division in the commercial register of the registered office of the company being divided, demand that the recipient company acquire the exchanged share or shares of the partner or shareholder for monetary compensation. The monetary compensation shall be equal to the money which the partner or shareholder would have received from the distribution of remaining assets upon liquidation of the company if the company had been liquidated at the time the division resolution was made.

 (2) The provisions of clauses 162 (2) 11) and 283 (2) 2) of this Code shall not apply to acquisition of shares by a company on the bases specified in subsection (1) of this section.

 (3) The names of partners or shareholders who oppose the division resolution and who wish to exercise the rights specified in this section shall be appended to the division resolution. Opposition to the division resolution shall be confirmed by each partner or shareholder by the signature of the partner or shareholder.

 (4) If a recipient company is a general partnership or limited partnership, the compensation specified in subsection (1) of this section may be demanded by a partner who departs from the company.

 (5) A recipient company shall pay a fine for delay on compensation in an amount provided by law as of entry of the division in the commercial register of the registered office of the company being divided.

 (6) If a partner or shareholder who opposes the division resolution does not demand the compensation specified in this section, the partner or shareholder may transfer a share or shares within two months regardless of the restrictions on disposal provided by law or prescribed by the articles of association.

§ 449. Division whereby new company founded

 (1) The provisions of this chapter together with amendments prescribed by law shall apply to a division whereby a new company is founded.

 (2) The provisions regarding recipient companies shall apply to companies being founded.

 (3) In the foundation of a new company, the foundation provisions for the class of company shall apply unless the provisions of this chapter provide otherwise. The founder shall be the company being divided.

 (4) Upon division whereby a new company is founded, the management board of or the partners entitled to represent the company being divided shall draft a division plan which shall substitute for the division agreement. In addition to the provisions of subsection 435 (1) of this Code, the division plan shall set out the business name and registered office of the new company. The articles of association or partnership agreement of the company being founded, which shall be approved by the division resolution, shall be appended to the division plan.

 (5) The management board of or the shareholders entitled to represent the company being divided shall submit a petition for entry of the new companies in the commercial registers of their registered offices and for entry of the division in the commercial register of the registered office of the company being divided.

 (6) The registrar of the commercial register of the registered office of each new company shall notify the registrar of the registered office of the company being divided of entry of the new company in the commercial register. Upon receipt of notification concerning all the new companies, the registrar of the commercial register of the registered office of the company being divided shall enter the division in the commercial register, shall notify the registrar of the registered office of each new company of the entry and shall send an extract from the commercial register to them. Upon receipt of notification, the registrar shall make a notation in the commercial register regarding when the division was entered in the commercial register of the registered office of the company being divided.

Division 2 General Partnership or Limited Partnership as Company Participating in Division  

§ 450. Meaning of contribution

  For the purposes of this chapter, the contribution of a partner of a general partnership or limited partnership shall be deemed to be a share.

§ 451. Content of division agreement

 (1) If a recipient company is a general partnership or limited partnership, the division agreement shall, in addition to the provisions of subsection 435 (1) of this Code, set out with regard to each partner or shareholder of the company being divided whether the partner or shareholder will become a general partner or limited partner of the recipient company and the amount of the contribution of the partner or shareholder.

 (2) If a limited partner of a limited partnership, a shareholder of a private limited company or a shareholder of a public limited company being divided opposes the division resolution, the recipient company shall be a limited partnership, and the opposing limited partner, shareholder of the private limited company or shareholder of the public limited company shall become a limited partner of the recipient company.

§ 452. Division report

  A division report need not be prepared if all partners of the general partnership or limited partnership being divided are managing partners of the company.

§ 453. Division resolution

 (1) A division resolution shall be adopted if all the partners vote in favour.

 (2) A partnership agreement may prescribe that the division resolution shall be adopted if more than two-thirds of the partners vote in favour. If a partner of the general partnership or a general partner of a limited partnership being divided opposes the division resolution, the partner or general partner shall become a limited partner of a recipient limited partnership.

 (3) If a division resolution may be made by a majority vote pursuant to the partnership agreement, a partner may demand an audit of the division agreement at the expense of the company.

§ 454. Liability of partners

 (1) If, upon distribution of a general partnership or limited partnership, a recipient company is a limited partnership, private limited company or public limited company, a general partner shall be liable for the obligations of the company being divided for which the due date for performance has arrived or will arrive within five years after entry of the division in the commercial register of the registered office of the company being divided.

 (2) If a recipient company is a limited partnership in which a general partner of the company being divided is to become a general partner, the liability restriction prescribed in subsection (1) of this section shall not apply with regard to the general partner.

Division 3 Private Limited Company as Company Participating in Division  

§ 455. Audit of division agreement

  A shareholder of a private limited company participating in a division may demand an audit of the division agreement at the expense of the private limited company. The corresponding written request shall be submitted within ten days as of providing the opportunity to examine the documents specified in subsection 440 (3) of this Code.

§ 456. Division resolution

 (1) A division resolution shall be adopted if at least two-thirds of the votes represented at the meeting of shareholders are in favour, and the articles of association do not prescribe a greater majority requirement.

 (2) If a division resolution is made pursuant to the procedure provided for in subsection 173 (2) of this Code, the resolution shall be adopted if at least two-thirds of the votes of the shareholders are in favour, and the law or the articles of association do not prescribe a greater majority requirement.

 (3) If the special rights of a shareholder concerning management of a company are damaged or restricted by division, the consent of this shareholder is also required for the adoption of the division resolution.

 (4) If all shares of the private limited company being divided are held by the recipient private limited companies or public limited companies, the approval of the division agreement by the division resolution of the private limited company being divided shall not be required for division. The own share of the company being divided shall not be taken into account in the determination of representation.

 (5) If the recipient company is a private limited company, the contribution for which shares has not been completely paid, the consent of all the partners or shareholders of the company being divided is necessary for the adoption of the division resolution. If the company being divided is a private limited company, the contribution for which shares has not been completely paid, the consent of all the partners or shareholders of the recipient company is necessary for the adoption of the division resolution.

§ 457. Increase of share capital of recipient company

 (1) Upon an increase of share capital of a recipient private limited company in connection with a division, other shareholders shall not have the pre-emptive right to the acquisition of shares (§ 193).

 (2) In addition to the documents specified in subsection 196 (1) of this Code, notarised copies of the division agreement and the division resolutions of the companies participating in the division shall be appended to the petition for entry of the increase of share capital in the commercial register.

 (3) In the case of the increase of the share capital of a recipient private limited company, the division shall not be entered in the register of the registered office of the company being divided before the increase of the share capital has been entered in the commercial register.

 (4) The recipient private limited company shall not increase the share capital for conducting the division to the extent to which the shares of the company being divided are held by the recipient private limited company or the company being divided itself, or by a person acting in his or her own name but at the expense of the company, except if the company being divided, upon separation, becomes the sole shareholder of the recipient private limited company.

§ 458. Transfer of shares upon division

 (1) A recipient private limited company shall first transfer its own share of the recipient private limited company to the partners or shareholders of the company being divided in the exchange of their shares.

 (2) If the own share of a recipient private limited company is transferred to the partners or shareholders of the company being divided, it may be divided without observing the restrictions on transfer provided by law and the articles of association and without taking account of the minimum permitted nominal value of a share.

 (3) [Omitted - RT I 1996, 40, 773 - entry into force 08.06.1996]

§ 459. Admissibility of transfer

  If a shareholder who opposes the division resolution does not demand the compensation specified in subsection 448 (1) of this Code, the shareholder may transfer a share within two months regardless of the restrictions on disposal provided for in subsections 149 (1)–(3) of this Code.

§ 460. Valuation of assets to be transferred

  If a recipient company is a private limited company whose share capital is to be increased in connection with a division or if a new private limited company is to be founded upon a division, the procedure prescribed for valuation of a non-monetary contribution of a private limited company (§ 143) shall be used to assess whether the assets transferred by the company being divided are sufficient for the increase of share capital or for the share capital of the private limited company being founded. Documents certifying the valuation of the assets shall be submitted to the commercial register together with the division petition.

§ 4601. Reduction of share capital of company being divided

 (1) If the share capital of a private limited company being divided must be reduced in order to organise a division, such reduction may be carried out under simplified procedure.

 (2) In the case of reduction of the share capital of a private limited company being divided, the division shall not be entered in the commercial register of the registered office of the company being divided before the reduction of the share capital has been entered in the commercial register.

§ 461. Division whereby new private limited company founded

 (1) The provisions of § 138 of this Code shall not apply to the division of a company whereby a new private limited company is founded.

 (2) Upon a division whereby a new private limited company is founded, the division plan shall, in addition to the provisions of subsections 435 (1) and 449 (4) of this Code, set out the amount of share capital and the members of the management board of the private limited company being founded. If a supervisory board is to be formed, the members of the supervisory board shall also be set out.

 (3) No division report needs to be prepared upon the division of a private limited company or public limited company involving the foundation of a new private limited company and the auditor need not audit the division agreement if in each private limited company or public limited company participating in division the shares are to be determined between the shareholders of the private limited company or the public limited company being divided based on the same proportion as in the private limited company or the public limited company being divided. Subsection 440 (5) of this Code shall also not apply in the case provided for in the previous sentence.

Division 4 Public Limited Company as Company Participating in Division  

§ 462. Audit

  If a public limited company participates in a division, an auditor shall audit the division agreement.

§ 463. Preparation of general meeting

 (1) At least one month before the general meeting to decide on a division, the management board shall present the following to the shareholders for examination at the registered office of the public limited company:
 1) the division agreement;
 2) the three preceding annual reports of the companies participating in division;
 3) the division reports of the companies participating in division;
 4) the sworn auditor's reports of the companies participating in division.

 (2) At the request of a shareholder, he or she shall be immediately provided free of charge either complete or partial copy, based on the shareholder's wish, of the documents specified in subsection (1) of this section. Upon the shareholder's consent, the copy may be sent to his or her e-mail address.

 (21) If a public limited company pursuant to § 63 of this Code has provided to the registrar its homepage address, to fulfil the requirements specified in subsections (1) and (2) of this section it may publish the documents on its homepage in a way which provides the opportunity for saving and printing these. The documents shall be available on the homepage of the public limited company within one month prior to the general meeting and until the end of the general meeting.

 (3) If the last annual report of a public limited company participating in division is prepared in respect to financial year, which ended earlier than six months prior to the entry into the division agreement, the balance sheet (interim balance sheet) compliant with the requirements established for the balance sheet that constitutes part of the annual report shall be prepared as at no earlier than the first day of the third month preceding the entry into the division agreement. The interim balance sheet shall be prepared using the same accounting policies and presentation which were used in the preparation of the balance sheet that constitutes part of the last annual report. The interim balance sheet shall be submitted to shareholders for examination pursuant to the procedure specified in subsections (1)–(21) of this section. The interim balance sheet need not be prepared if all the shareholders of the public limited companies participating in division agree thereto. Instead of the interim balance sheet, the half-yearly report disclosed pursuant to § 18411 of the Securities Market Act may be submitted to shareholders for examination.

 (4) At least one month prior to the general meeting deciding on the division, the management board shall submit the division agreement to the registrar of the commercial register or disclose it on the homepage of the public limited company. Upon the disclosure of the division agreement on the homepage of the public limited company, it shall be available to the public free of charge until the end of the general meeting. In addition, the management board shall publish in the official publication Ametlikud Teadaanded a notice concerning the entry into the division agreement. The notice shall indicate where or at which homepage address it is possible to examine the division agreement and other documents specified in subsection (1) of this section and receive copies of these documents. Upon the disclosure of the division agreement on the homepage of the public limited company, the notice shall also indicate the disclosure date of the division agreement.

 (5) If the public limited company is required to make public the regulated information in the central recording system for information specified in subsection 1846 (5) of the Securities Market Act, the division agreement may be disclosed in such system instead of the homepage of the public limited company. In the remaining part, subsection (4) of this section shall apply.

§ 464. Organisation of general meeting

 (1) At the general meeting, the management board shall explain the legal and economic consequences of the division, including the exchange of shares.

 (2) At the general meeting, the supervisory board shall present its opinion concerning the division.

 (3) At the general meeting, information concerning material circumstances related to other companies participating in the division shall also be given to a shareholder on the demand of the shareholder.

 (4) [Repealed - RT I, 02.11.2011, 1 - entry into force 12.11.2011]

§ 465. Division resolution

 (1) A division 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.

 (2) If a public limited company has several classes of shares, the division resolution shall be adopted if, in addition to the provisions of subsection (1) of this section, at least two-thirds of the holders of each class of shares vote in favour of the resolution, and the articles of association do not prescribe a greater majority requirement. If a resolution is made pursuant to the procedure provided for in subsection 297 (2), at least two-thirds of the votes represented of each class of shares at the general meeting must vote in favour of the resolution unless the articles of association prescribe a greater majority requirement.

 (3) If a recipient company is not a public limited company, the holders of preferred shares and convertible bonds of the public limited company being divided shall participate in the determination of representation and in voting on the same bases as the shareholders.

 (4) If all shares of the public limited company being divided are held by the recipient private limited companies or public limited companies, the approval of the division agreement by the division resolution of the public limited company being divided shall not be required for division. The own shares of the public limited company being divided shall not be taken into account in the determination of representation. The public limited company being divided shall at least one month before the creation of the rights and obligations arising from the merger agreement perform the disclosure obligations specified in § 463 of this Code. The information specified in subsection 440 (5) of this Code shall record all material changes that occurred in the assets of the company following the entry into the division agreement.

§ 466. Increase of share capital of recipient public limited company

 (1) Upon an increase of share capital of a recipient public limited company in connection with a division, other shareholders shall not have the pre-emptive right to the acquisition of shares (§ 345).

 (2) In addition to the documents specified in subsection 343 (1) of this Code, notarised copies of the division agreement and the division resolutions of the companies participating in the division shall be appended to the petition for entry of the increase of share capital in the register.

 (3) In the case of the increase of the share capital of a recipient public limited company, the division shall not be entered in the register of the registered office of the company being divided before the increase of the share capital has been entered in the commercial register.

 (4) The recipient public limited company shall not increase the share capital for conducting the division to the extent to which the shares of the company being divided are held by the recipient public limited company or the company being divided itself, or by a person acting in his or her own name but at the expense of the company, except if the company being divided, upon separation, becomes the sole shareholder of the recipient public limited company.

§ 467. Transfer of shares upon division

  A recipient public limited company shall first transfer its own shares of the recipient public limited company to the partners or shareholders of the company being divided in the exchange of their shares.

§ 468. Valuation of assets to be transferred

 (1) If a recipient company is a public limited company whose share capital is to be increased in connection with a division or if a new public limited company is to be founded upon a division, the procedure prescribed for valuation of a non-monetary contribution of a public limited company (§ 249) shall be used to assess whether the assets transferred by the company being divided are sufficient for the increase of share capital or for the share capital of the public limited company being founded. Documents certifying the valuation of the assets shall be submitted to the commercial register together with the division petition.

 (2) The division report shall provide reference to the sworn auditor's report concerning the valuation of a non-monetary contribution and specify the register where this report is deposited pursuant to § 343 of this Code.

§ 4681. Reduction of share capital of company being divided

 (1) If the share capital of a public limited company being divided must be reduced in order to organise a division, such reduction may be carried out under simplified procedure.

 (2) In the case of reduction of the share capital of a public limited company being divided, the division shall not be entered in the commercial register of the registered office of the company being divided before the reduction of the share capital has been entered in the commercial register.

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

§ 470. Protection of holders of preferred shares or convertible bonds

 (1) The rights of holders of preferred shares or convertible bonds of a public limited company being divided which they had in the public limited company being divided shall be retained in a recipient public limited company.

 (2) If a recipient company is not a public limited company, the holders of preferred shares or convertible bonds shall acquire shares of the recipient company on the same bases as the shareholders of the public limited company being divided. Upon opposition to the division agreement, they may claim compensation pursuant to § 448 of this Code.

§ 471. Division whereby new public limited company founded

 (1) The provisions of §§ 243 of this Code shall not apply to the division of a company whereby a new public limited company is founded.

 (2) Upon a division whereby a new public limited company is founded, the division plan shall, in addition to the provisions of subsections 435 (1) and 449 (4) of this Code, set out the amount of share capital and the members of the management board and supervisory board of the public limited company being founded.

 (3) Neither division report nor interim balance sheet needs to be prepared upon the division of a private limited company or public limited company involving the foundation of a new public limited company and the auditor need not audit the division agreement if in each private limited company and public limited company participating in division the shares are to be determined between the shareholders of the private limited company or the public limited company being divided based on the same proportion as in the private limited company or the public limited company being divided. Subsection 440 (5) of this Code shall also not apply in the case provided for in the previous sentence.

Division 5 Commercial Association as Company Participating in Division  

§ 472. Commercial association as company participating in division

  Upon separation, the company being divided shall not become a member of the association being separated.

§ 473. Contribution and membership

 (1) For the purposes of this chapter, a contribution to a commercial association shall be deemed to be a share.

 (2) For the purposes of this chapter, a member of a commercial association shall be deemed to be a shareholder.

§ 474. Audit of division agreement

  A member of a commercial association being divided may demand an audit of the division agreement at the expense of the commercial association. The corresponding written request shall be submitted within ten days as of providing the opportunity to examine the documents specified in subsection 440 (3) of this Code.

§ 475. Division resolution

  A division resolution shall be adopted if at least two-thirds of the members who participate in the meeting vote in favour, and the articles of association do not prescribe a greater majority requirement.

§ 476. Valuation of assets to be transferred

  The assets to be transferred of a commercial association being divided shall be valuated pursuant to the procedure prescribed for valuation of a non-monetary contribution of an association. Documents certifying the valuation of the assets shall be submitted to the commercial register.

§ 477. Division whereby new commercial association founded

  Upon a division whereby a new commercial association is founded, the division agreement shall, in addition to the provisions of subsections 435 (1) and 449 (4) of this Code, set out the members of the management board of the association being founded. If a supervisory board is to be formed, the members of the supervisory board shall also be set out.

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