Liquidation or keeping the dormant company?

Lately we have seen the court giving fines for not presenting the annual reports. The company has an obligation to do so every year even if dormant. Paying the contact person fee and a fee for the annual report can add up so a voluntary dissolution (liquidation) is another option which is not as expensive as people might think.

The law prescribes strict deadlines for different stages that have to be followed even if you have not had any economic activity so the whole process will take at least 7 months. The good news is that you do not have to do anything during the process.

The first step is for the owner or owners to take a formal decision to liquidate and a liquidator has to be appointed. This decision then has to be reflected in the Commercial Register. If the shareholders have a digital card for signature then this is rather easy.

The next step is to publish the liquidation notice in the portal: and call for all creditors to come forward with their possible claims. The deadline for this is 4 months and liquidator shall pay the amounts due after the end of that deadline. The liquidator will already take care of that.

After that it is possible to prepare the final balance sheet of the private limited company and to distribute the remaining assets. And only after that is it possible to delete the company from the Commercial Register. The final balance sheet and asset distribution plan has to be sent to the Commercial Register as well. As the final step the company can be deleted from the Commercial Registry and again the liquidator will take care of that.

Expat Legal Estonia helps with the liquidation process from start to finish.

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