Shareholders’ Resolutions
for Estonian Companies
Also known as Shareholders Decisions or General Meeting minutes
Overview
Formally required for registry amendments
In Estonia, most amendments to company registry information require formal approval from shareholders. These decisions must be properly documented through General Meeting Minutes or shareholders' decisions to ensure legal compliance and facilitate smooth administrative processes.
It must be drafted precisely
It is important to emphasize that shareholders' resolutions that are submitted to the business register and serve as the basis for changing registry data must be drafted with particular precision. Any even minor deficiency in a shareholders' resolution may cause problems with the business register, and the desired changes may remain unimplemented due to the deficient resolution.
Documents in Estonian
All documents submitted to the Business Register must be in Estonian or bilingual with parallel text. If the original document has been prepared in a foreign language, then it must be translated by a sworn translator before submission to the register.
Strong signatures are required
In most cases, shareholders' resolutions must be signed either digitally or have their signatures approved by a notary.
When Required
A shareholder resolution is necessary for various registry amendments, including:
Shareholder resolutions are mandatory for most registry changes, including:
Board members’ changes: Adding or removing board members
Share Capital Adjustments: Increasing or reducing the company's capital
Company name changes
Articles of Association Amendments: Modifying company governance rules
Fiscal Year Changes: Altering the company's financial year
Company Location and Address Changes: Moving to a different municipality
Shareholder Changes: Adding or removing shareholders (particularly when share capital is at least €10,000 and articles permit simplified transfers)
Starting company liquidation, splitting the company, or merging it with another company
Key Methods
1. Consensual Shareholder Decision:
This is the most common and easiest way for shareholders to make decisions, requiring all shareholders to agree with the decision.
A consensual decision is made and signed either by hand or digitally by all shareholders. In the case of a decision adopted and signed in this manner, there is no need to conduct a classical meeting along with the resulting formalities.
2. Written Decision Without a Meeting:
This method is the best option when some of the shareholders (minority) either can’t vote, don’t want to vote, or vote against the decision.
This flexible option allows making shareholder decisions without a physical meeting. The management board prepares a draft shareholder decision and sends it in a form that enables written reproduction (usually by email) to all shareholders, setting a deadline within which the shareholder must present their position on it in a form that enables written reproduction (usually by email). If a shareholder does not indicate within the specified deadline whether they are for or against the decision, they are considered to vote against the decision.
Regarding the voting results, the management board prepares a voting protocol, which at least one registered member of the management board signs and then sends immediately to all shareholders. Decisions made in this manner are generally considered adopted if more than half of all shareholder votes are in favor. The articles of association may also stipulate a requirement for a larger majority.
This method of decision-making makes the voting process significantly more flexible compared to a classical meeting and is ideally suited for companies with international shareholders located in different countries who cannot physically participate in meetings.
3. Classical Shareholder Meeting:
This method is used when discussions between shareholders are necessary and the outcome to be decided is not clear.
This traditional method of decision-making involves holding a physical shareholder meeting at the location and address of the company. Conducting the meeting requires that it be convened in accordance with legal and articles of association requirements and that appropriate meeting invitations be sent to all shareholders in a timely manner. The meeting must be attended by the shareholder or their authorized representative (power of attorney required). Conducting the meeting also requires the presence of the necessary quorum and compliance with many other various formalities in the formalization of decisions.
This method can generally be used in situations where all shareholders live or are located in Estonia and can participate in the physical meeting. However, for shareholders living or located in different countries, holding such meetings is often an additional time and financial cost.
By choosing from among these methods, Estonian limited liability companies can achieve legally compliant shareholder decision-making.
Signature Requirements
Valid shareholder resolutions require proper signatures through one of these methods:
Digital Signature: The preferred method due to convenience and full
compliance with Estonian e-signature legislationHandwritten Signature: Acceptable when the board member signs the registry application. Original documents must be physically submitted to the Business Registry
Notarized Certification: When digital signatures are not possible, a notary must verify signatory identities
Power of Attorney: Required when a representative signs on behalf of a
shareholder. The power of attorney document must accompany the resolution.