Company transformation

If necessary, you can transform your company into another type of company; for instance a public limited company can be transformed into a private limited company.

A commercial association cannot be transformed, nor can other forms of business be transformed into a commercial association.

Transformation decision and report

The partners or shareholders of the company being transformed shall make the transformation decision. The management board or shareholders of the company being transformed shall prepare a transformation report in which they justify legally and economically the transformation, as well as the ratio of replacement of shares and if necessary the amount of cash payment. A transformation report is not required if the company has only one partner or shareholder or if all partners or shareholders are in agreement. A new article of association or partnership agreement must be prepared for the new type of company. In the case of a private limited company or public limited company, the members of the management board and, if necessary, members of the supervisory board shall be elected.

Public disclosure of transformation

The transformation must be notified to the publication Ametlikud Teadaanded after the transformation is entered into the Commercial Register.

Compensation claims

If you are the partner or shareholder of the company being transformed, but did not consent to the transformation, you will have the right within two months of the entry of the transformation into the Commercial Register to demand monetary compensation for your share in the company. If the company was transformed into a general partnership or limited partnership, you may demand compensation upon leaving the company.

Potential methods of transformation

  • from a general partnership or limited partnership into a private limited company or public limited company
  • from a private limited company or public limited company to a general partnership or limited partnership
  • from a private limited company to a public limited company
  • from a public limited company to private limited company

The transformation decision shall be made by the partners or shareholders in the company being transformed.

The management board or shareholders of the company being transformed shall prepare a transformation report in which they justify legally and economically the transformation, as well as the ratio of replacement of shares and if necessary the amount of cash payment. A transformation report is not required if the company has only one partner or shareholder or if all partners or shareholders are in agreement.

A new article of association or partnership agreement must be prepared for the new type of company.

In the case of a private limited company or public limited company, the members of the management board and, if necessary, members of the supervisory board shall be elected.

Legislation

Related authorities

Related topics

Last amended: 20-01-2017 15:29 | Compiled by: Ministry of Justice