the company fails to notify the register of his future plans
regarding to equity, or ignores the warning letter or a regulation in
full, then the commercial register has a right for compulsory
dissolution of the company and remove it from the commercial
register. Whether it is an active company or a shell company, has no
relevance in this connection.
a private limited company or public limited company has net assets
less than required, the Commercial Code provides the following ways
for equity alignment:
increase or reduction of share capital with either monetary or
dissolution of the company or submission of bankruptcy petition;
company's reorganization through merger, division or transformation;
possible measures (involvement of investors, the sale of shares, the
formation of additional reserves).
CONTRIBUTION AS A POSSIBILITY FOR EQUITY IMPROVEMENT
practice, the most common ways of solving the problem of equity are
monetary or non-monetary contributions made by shareholders.
contribution may be the owners’ loan, debt, miscellaneous items,
the property – any thing which is monetarily appraisable or a
proprietary right which may be the object of a claim.
order to improve equity through a non-monetary contribution the
following documents should be prepared:
report on non-monetary contribution value;
of conveyance of non-monetary contribution;
application to the commercial register;
necessary, change the statutes or the drafting of the new articles
necessary, notification to the Estonian Central Securities Registry,
the case of a joint stock company, an auditor will verify the
adequacy of the assessment of the value of the contribution and will
prepare a written report hereof.
case of private company an auditor must verify the valuation of the
property only if the share capital of the company is at least EUR
25 000 and non-monetary contribution exceeds 1/10 of the share
capital. All private limited companies, the capital of which is up to
EUR 24 999, appreciates the value of the contribution by the
management board, and the auditor does not have to examine it
practice is also used the possibility of establishing a voluntary
supplementary reserve; the establishment, operation and termination
procedures of it must be decreed in the statutes of the company.
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