Estonia Commercial Code

Estonia Companies Act

Estonia Companies Act Estonia Companies Act Estonia Companies Act

Passed 15.02.1995 - Entry into force 01.09.1995

Part I GENERAL PART 

Chapter 1 GENERAL PROVISIONS  

§ 1. Undertaking

  An undertaking is a natural person who offers goods or services for charge in his or her own name where the sale of goods or provision of services is his or her permanent activity, or a company provided by law.

§ 2. Classification of companies

 (1) A company is a general partnership, limited partnership, private limited company, public limited company or commercial association. Other companies may also be prescribed by law.

 (2) A company shall be entered in the commercial register.

 (3) The passive legal capacity of a company shall commence as of its entry in the commercial register and shall terminate as of its deletion from the commercial register.

 (4) Companies may merge, divide or be transformed only in the cases and pursuant to the procedure provided by law.

 (5) In the cases provided by law, the permission of a competent agency is required for merger, division or transformation.

§ 3. Sole proprietorship

 (1) Any natural person may be a sole proprietor.

 (2) A sole proprietor shall submit a petition for his or her entry in the commercial register before the commencement of the activity.

 (3) A sole proprietor may notify the registrar of the commercial register of the suspension of the activities of his or her enterprise in advance specifying the period of time when the enterprise does not operate. A sole proprietor, the activity of whose enterprise due to the nature of the area of activity is seasonal, may notify the registrar of the commercial register of the starting date and final date of the activity of the enterprise. The notification of the starting date and final date of the activity of the enterprise may also be provided in case of temporary activity.

§ 4. Areas of activity of undertaking

 (1) An undertaking may operate in areas of activity in which operation is not prohibited by law.

 (2) Areas of activity for which a licence is required or in which only a particular class of undertaking may operate may be provided by law.

 (3) [Repealed - RT I 2006, 61, 456 - entry into force 01.01.2007]

 (4) A farmer is an undertaking engaging in at least one activity which can be classified as production of agricultural products and who uses a farm for such purpose in the capacity of an owner, usufructuary or commercial lessee.

 (5) Upon entry in the commercial register, an undertaking shall specify its planned principal activity and shall keep the register informed of any changes to the principal activity. A company required to file the annual report with the commercial register, shall indicate the areas of activity of the year ended and the areas of activity intended for the new accounting year in its annual report and shall not make a separate announcement of any change in these. Upon notification the commercial register of activities and specification of activities in annual reports, the Classification of Economic Activities, EMTAK, is used.

 (6) The Classification of Economic Activities shall be established by a regulation of the Minister of Justice. The Minister of Justice may determine the level of classification to be used upon giving the commercial register notice of activities and upon specifying activities in annual reports.

§ 5. [Repealed - RT I 2009, 5, 35 - entry into force 01.07.2009]

§ 6. Group

 (1) If a company is a partner or shareholder of another company and owns a majority voting interest therein, the participating company shall be called the parent undertaking, and the company in which it participates shall be called a subsidiary. A company in which another subsidiary or subsidiaries, with or without the parent undertaking, have a majority voting interest is also a subsidiary of the parent undertaking.

 (2) A subsidiary is also a company in which another company (parent undertaking) has control as a partner or shareholder, on the basis of an agreement or without an agreement.

 (3) A parent undertaking together with its subsidiaries forms a group.

Chapter 2 BUSINESS NAME  

§ 7. Definition of business name

  A business name or firm is the name entered in the commercial register under which an undertaking operates.

§ 8. Business name of sole proprietorship

 (1) The business name of a sole proprietorship shall contain the given name and surname of the sole proprietor, and shall not contain an appendage or abbreviation referring to a company.

 (2) The business name of a farmer who is a sole proprietor need not contain the given name and surname of the sole proprietor if the name of the farm is contained in the business name.

 (3) If a sole proprietor transfers the enterprise to another natural person, the transferee may continue to operate under the existing business name with the written consent of the transferor.

 (4) If a natural person acquires an enterprise by way of succession, the transferee may continue to operate under the existing business name.

 (5) If a name contained in the business name of a sole proprietorship is changed, the sole proprietor may continue to operate under the existing business name.

 (6) A sole proprietor may have several business names as long as such names are used with regard to different enterprises.

§ 9. Business name of company

 (1) A company may only have one business name.

 (2) The business name of a general partnership shall contain the appendage “täisühing” [general partnership]; a limited partnership, the appendage “usaldusühing” [limited partnership]; a private limited company, the appendage “osaühing” [private limited company]; a public limited company, the appendage “aktsiaselts” [public limited company]; and a commercial association, the appendage “ühistu” [association].

 (3) Instead of the appendages specified in subsection (2) of this section, a general partnership may use the abbreviation “TÜ”; a limited partnership, the abbreviation “UÜ”; a private limited company, the abbreviation “OÜ”; and a public limited company, the abbreviation “AS” in its business name.

 (4) The appendages and abbreviations specified in subsections (2) and (3) may only be used at the beginning or end of the business name.

§ 10. Transfer of business name

  A business name shall not be transferred without the enterprise, except if the business name is transferred upon liquidation or in the bankruptcy proceedings of an undertaking.

§ 11. Distinctiveness of business name

 (1) The business name of a sole proprietorship shall be clearly distinguishable from other business names entered in the commercial register in the territorial jurisdiction of the same registrar.

 (2) The business name of a company shall be clearly distinguishable from other business names entered in the commercial register in Estonia.

 (21)

 (3) If the given name and surname of a sole proprietor for which a petition for entry in the register is made are the same as a given name and surname already entered in the register as a business name or as a part thereof, the applicant of the entry shall render his or her business name clearly distinguishable by adding or omitting appendages.

§ 12. Restrictions on choice of business name

 (1) A business name shall not be misleading with regard to the legal form, area of activity or scope of activity of the undertaking.

 (2) A business name shall not be contrary to good morals.

 (3) A sign or combination of signs which consists of letters, words or numerals and is protected as a trade mark in Estonia shall not be used in a business name without the notarised consent of the owner of the trade mark, unless the undertaking is engaged in an area of activity in respect of which the trade mark is not protected. Subsection 33 (11) of this Code applies to such consent.

 (31) A person who does not have the right to use a geographical indication is prohibited from using a registered geographical indication in the business name, except if the person operates in the area of activity concerning which the geographical indication is not protected.

 (32) Subsections (3) and (31) also apply upon changing of activities after the entry of the business name in the commercial register.

 (4) The Government of the Republic may establish restrictions on the use of the word “Eesti” [Estonia] in a business name in all expressions and foreign language equivalents, except in the business name of the branch of a foreign company pursuant to the provisions of § 14 of this Code.

 (5) If a business name contains the name of a state or administrative unit or other place-name in addition to the appendage referring to the company, the business name shall contain an appendage which distinguishes it from the name of the state or administrative unit or other place-name.

 (6) The names of state and local government bodies and agencies shall not be used in a business name.

 (7) The words “riigi” [state], “linna” [city] and “valla” [rural municipality], and other words which refer to the participation of a local government may be used in the business name of a company only if the state or local government holds more than one-half of the shares of the company.

 (8) A business name shall be written in the Estonian-Latin alphabet.

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

§ 13. Use of name in business name

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

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

 (3) The name of a person who is not the sole proprietor shall not be used in the business name of a sole proprietorship, the name of a person who is not a partner shall not be used in the business name of a general partnership, and the name of a person who is not a general partner shall not be used in the business name of a limited partnership.

 (4) The provisions of subsection (3) of this section shall not apply if the sole proprietor transfers the enterprise, or if a partner of a general partnership or a general partner of a limited partnership departs or is excluded from the company.

§ 14. Business name of branch of foreign company

  The business name of the branch of a foreign company shall consist of the business name of the company and the words “Eesti filiaal” [Estonian branch].

§ 15. Use and protection of business name

 (1) An undertaking has the exclusive right to the business name of the undertaking. A court may prohibit, in proceedings on petition, the use of a business name which does not conform to the requirements of this Chapter or which a person has no right to use and, if such prohibition is violated, to impose a fine on the violator. The above shall not preclude the protection of the business name in the proceeding of an action.

 (2) The commercial documents of the undertaking and its webpage shall indicate the business name, registered office and commercial registry code of the undertaking. If the commercial documents and webpage of a private limited company or public limited company contain reference to the company's capital, the amount of the share capital and, in case contribution for shares has not been completely paid, the amount of outstanding contributions shall also be specified. The commercial documents of the branch of a foreign undertaking and its webpage shall include the information specified in the first and the second sentence of this subsection regarding both the undertaking and its branch, if it is relevant. In addition, the commercial documents of the branch and its webpage shall indicate the legal form of the foreign undertaking and the register where the undertaking is registered. If the foreign undertaking is being liquidated, a reference to this fact shall be provided.

 (3) [Repealed - RT I 2002, 53, 336 - entry into force 01.07.2002]

Chapter 3 PROCURATION  

§ 16. Definition of procuration

 (1) Procuration is an authorisation which grants the representative of the undertaking (procurator) the right to represent the undertaking in concluding all transactions related to economic activities.

 (2) The procurator may transfer or encumber an immovable of the undertaking only if the undertaking grants this right to him or her in the procuration, and this is noted in the commercial register.

 (3) If the undertaking restricts a procuration, the restriction shall not apply with regard to third persons, except the restrictions provided for in this Act.

 (4) The provisions concerning representation in the General Part of the Civil Code Act apply to procuration unless otherwise provided for in this Code.

§ 17. Grant of procuration

 (1) Procuration may be granted by a company, a sole proprietor entered in the commercial register or a legal representative of a sole proprietor. Upon entry of an undertaking in the commercial register, procuration shall be granted by a sole proprietor; upon foundation of a general partnership or limited partnership, procuration shall be jointly granted by all managing partners and, upon foundation of a private limited company, public limited company or commercial association, procuration shall be jointly granted by the founders by the memorandum of association of the company.

 (2) Procuration may only be granted to a natural person. An undertaking may have one or several procurators.

 (3) Procuration may be granted to several persons in such a manner that all or some of the procurators are only entitled to represent the undertaking jointly (joint procuration). Procuration may be granted in such a manner that the procurator may represent the undertaking only jointly with a member of the management board or with a partner who is entitled to represent the company.

 (4) A foreign company may grant a procuration for the representation of a branch.

 (5) A partner of the same general partnership or limited partnership, a member of the supervisory board of the same company or the auditor of the same company shall not be a procurator.

§ 18. Signature of procurator

  A procurator shall sign such that he or she adds the word “prokurist” [procurator] or the abbreviation “p.p.” (per procura) to his or her signature.

§ 19. Bases for termination of procuration

 (1) An undertaking may terminate a procuration at any time.

 (2) A procurator may demand that the undertaking terminate the procuration if the legal relationship which is the basis for the procuration terminates.

 (3) A procuration shall not terminate upon the death of a sole proprietor.

§ 20. Prohibition on transfer of procuration

  A procurator shall not transfer a procuration.

§ 21. Entry of procuration

 (1) An entry concerning a procuration shall be entered in the commercial register on the petition of the undertaking. In the case of a company, the resolution of the body which appointed the procurator shall be appended to the petition.

 (2) An entry concerning a procuration shall set out the name and personal identification code of the procurator. If a procuration is granted to several procurators, the entry shall contain a notation concerning if and to which of them joint procuration is granted.

 (3) [Repealed - RT I 1998, 59, 941 - entry into force 10.07.1998]

Estonia Companies Act Estonia Companies Act Estonia Companies Act

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