Steps and duration for liquidating an Estonian company (OÜ)
The liquidation of an Estonian company is a process to close the business, settle debts, and remove the company from the Commercial Register. The whole process usually takes about 7 months.
Necessary steps for liquidation:1. Liquidation decision and appointment of liquidator(s)
To begin the liquidation process, the shareholders' decision must be made and signed. Generally, the liquidators are the board members, but the shareholders may also appoint other suitable persons as liquidators. Only a person who is prohibited from acting as a member of the management board can not be a liquidator.
2. Entering the termination decision and liquidators in the Commercial Register
The board submits an application to enter the liquidators’ data in the Business Register. The shareholders’ decision must be attached to the application, also all liquidators’ written confirmations concerning their right to act as liquidators pursuant to law.
3. Informing creditors about the liquidation
After the liquidators have been entered in the Business Register, they must immediately notify the creditors about the liquidation of the company. Creditors are notified by publishing the liquidation notice in the official publication “Ametlikud Teadaanded” (https://www.ametlikudteadaanded.ee/), which is kept electronically. The notice must state that creditors must submit their claims within 4 (four) months from the publication of the notice. In addition to this notification, liquidators must send a written liquidation notice to all creditors who are definitely known to them in connection with contractual relations, etc.
4. Liquidation report
Upon adoption of a dissolution resolution, the liquidators prepare a liquidation report. The liquidation report is approved by a resolution of the shareholders and it must be submitted to the Business Register within 4 (four) months after the date of the dissolution resolution.
5. Collecting debts and satisfying creditors' claims
The liquidators perform the necessary actions to pay off the company's debts and collect the debts from the debtors. If necessary, the liquidators sell the company's assets.
In addition, when the company is liquidated, employment relationships (contracts) with employees must be terminated. The basis for terminating the employment contracts is the liquidation of the company.
6. Final liquidation report
After satisfaction of the claims of all creditors and the deposit of money, the liquidators prepare the final liquidation report, including a distribution plan for the assets remaining upon liquidation which constitutes a part of the final liquidation report. The liquidators must present the final liquidation report to the shareholders for examination.
7. Distribution of assets
After debts are settled and there are still assets left in the company, remaining assets are distributed among the shareholders according to their ownership in the company.
8. Finalizing the liquidation process
Depending on the company, the complexity of the liquidation process and also deadlines prescribed by the law it takes usually minimum 7 months to submit the final deletion application to the Business Register. Together with the deletion application, the final balance sheet and asset distribution plan are also submitted to the registry.
In the application, the liquidators also appoint a depositary of documents, whose data will be entered in the register and in whose hands the documents will be kept. The depositary of documents can be a liquidator, a person maintaining an archive, or another trustworthy person. Documents must be kept in Estonia.
The Business Register reviews the application, and if everything is in order, the company is officially dissolved and removed from the register.