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Estonia emerges in these last few years as an entrepreneurial destination, given the country’s commitment to practically lead global trends towards the integration of internet as the most practical and handy means to establish legal entities of commercial scope.

In light of the above, the types of company formation or even of entrepreneurial orientation available according to the Estonian Commercial Code read as follows:

  • General partnership
  • Limited partnership
  • Private limited company
  • Public limited company
  • Sole proprietorship, and
  • Commercial association

If you have reached your decision and Estonia is set to be your next business destination, then you should bear in mind the following practical information regarding the most common legal types of Estonian commercial law:

General Partnership

Common and quite easy to be established legal formation, where at least two people decide to cooperate while they are both liable for any sort of mishap with which their company may be faced.

Limited Partnership

The main difference between this formation and the just aforementioned is that one of the at least two sine qua non partners that have to come together in order for this particular company to be established is that he/ she is only liable for his/ share of participation while the remaining one has to undertake full responsibility of the company’s activities

Private limited company

It has to be stressed that private and public limited companies are the two most common legal formations at least within Estonia. As far as the private limited is concerned, this is usually favored in terms of small and medium size entrepreneurial endeavours. Furthermore, it is usually most preferable for those who, sort of speak, wish to keep the company to themselves, as opposed to public limited companies whose orientation is more extrovert

Public limited company

Elaborating a little further in this certain company type it needs to be realized that this is the most favourable legal platform for persons, both natural and legal, who are eager to sail in far more unchartered waters. On the other hand, the minimum share capital needed for such a company is 25.000, 00€, thus ten times more in comparison to the private limited one, and this is probably the reason why a management board and a supervisory board are deemed necessary in order for this company formation to be directed and supervised. Last but not least, it has to be pinpointed that in the case of this company formation certain accounting requirements must be met, while an auditor needs to be appointed, among others because in the case of public limited company as opposed to the private limited one, capital shares are susceptible to be sold to the public

Sole proprietorship

If a few words need to be said about the case of sole proprietorship, then it should be noted that the term is used in order to describe someone who wishes to get involved in entrepreneurial endeavors solely by himself/ herself, and he / she shall be able to do so, by keeping in mind, of course, that he/ she shall be liable with all of his/ her personal belongings/ properties for debts and obligations related to his/her business initiatives. The sole proprietorship needs to be registered with the Commercial Register before getting involved in any sort of business activities.

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