Sale of a share in private limited company (Osaühing) will get easier - for some

March 3, 2020

Estonian Parliament is about to pass legislation that will make it easier to sell the share in a private limited company (in Estonian: Osaühing, OU). The new law could pass next week. 

 

Firstly the new law enacts 1 cent as the minimum value of 1 share (currently it is 1 euro). This would give flexibility regarding division of share capital.

 

Secondly the formal requirements for the share sale transaction will become easier. Currently the sale of the share or share has to be a notarized transaction (unless the shares are listed in the central securities registry). But the easier requirements are not planned to apply for every company. The notarial requirement will be abolished for companies with a share capital of at least 10 000 euros that has also been paid in - meaning there is a corresponding note also in the business registry. Also the articles of association of the company need to foresee this option. If the articles are to be amended for this option, all shareholders need to agree to it.

 

So the proposed changes will definitely make it easier for certain types of business owners to sell their shares or issue shares. At the same time, most companies will be unaffected.

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