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Estonia

Typical legal form for start-ups

osaühing (OÜ)

Brief information

Estonian start-ups usually choose the legal form of the OÜ. It offers the advantages of an individual legal personality, limited shareholder liability, flexible corporate governance and a minimum share capital of only EUR 2,500. The OÜ is similar to the German GmbH.

A PE/VC Fund can participate in the Supervisory Board if it is established.
A PE/VC Fund can also in principle accept an observer seat, whereby the contractual structure is decisive in the individual case. The observer may not exercise any influence on the management decisions.

The Management Board (Juhatus) manages the business of the OÜ. A Supervisory Board (Nõukogu) may be set up to monitor the board. If no Supervisory Board is established, the shareholders' meeting is responsible for supervision. In addition, investors can be granted observer seat status by contract. The observer may attend meetings of the management but is not entitled to vote.
Investors often demand the establishment of a Supervisory Board in order to prevent a liability risk of a representative in the Management Board.

A PE/VC Fund can participate in the Supervisory Board.
A PE/VC Fund can also in principle accept an observer seat, whereby the contractual structure is decisive in the individual case. The observer may not exercise any influence on the management decisions.

Other legal form

aktsiaselts (AS)

Brief information

The AS is similar to the German stock corporation and differs slightly from the OÜ by a higher minimum share capital and an obligatory dualistic corporate governance. A conversion to AS usually occurs due to tax reasons or an IPO.

A PE/VC Fund can participate in the Supervisory Board.

The AS has a compulsory dualistic structure. In addition to the Management Board (Juhatus), a Supervisory Board (Nõukogu) must always be established.

The information in our toolbox provides managers of private equity or venture capital funds with an initial overview of certain framework conditions in the respective country. It does not provide advice on the law of any country, neither does it substitute such advice. Before taking over a board seat in a portfolio company, it is at all times necessary to seek expert advice. Our team is happy to assist you with all questions at any time.

In collaboration with: Sorainen