Takeovers - Estonia

Updated 07/2012

Legal requirements

The Commercial Code provides for the possibility of a majority shareholder, who owns more than 90% of the shares of a public limited company, taking over the shares of minority shareholders in exchange for fair monetary compensation.

Commercial Code
Merging with another enterprise - Estonia

Stages of takeover

The takeover of shares is initiated by the majority shareholder by submitting their application. The general meeting of shareholders decides upon the takeover of the shares held by minority shareholders. The majority shareholder has to present the general meeting a written statement (takeover report), in which the terms and conditions for the takeover of shares of the minority shareholders and the grounds for determination of the amount of compensation are explained and justified. The takeover report must be inspected by an auditor who will thereupon prepare a written statement.

Retiring business owners need to plan the transfer of their business in advance.

Selling on — Estonia

Some standard requirements to be completed when taking over a business are the same as when setting up a new business.

Start-ups — Estonia

Administrative procedures

When deciding upon the takeover of shares of the minority shareholders, the minutes of the general meeting must be notarised.

Registration

Once a takeover decision is made, the management board of the public limited company must send an application to the Estonian Central Securities Depository, which will arrange the transfer of shares to the majority shareholder and the transfer of compensation amounts to the minority shareholders.

Estonian Central Securities Depository

The management board of the public limited company shall immediately inform the registrar of the Commercial Register about the transfer of shares.