Establishing a commercial association

A commercial association (tulundusühistu) is a company aimed at supporting and advancing the economic interests of its members through collective business activity. Members take part in the association in the following role:

  • as consumers or users of other benefits;
  • as suppliers;
  • by contributing labour;
  • through using services;
  • in some other similar manner.

The advantage of a commercial association is that members lack personal liability for the association’s obligations. At the same time, a commercial association is bound by a minimum capital requirement of 2,500 euros and there must be at least two founders.

What must be done before establishing a commercial association? 

Before founding the commercial association, find the answers to the primary questions that will determine the most important rules of your company’s everyday activity.

  • What will the company’s business name be?
  • What will your initial area of activity be?
  • Who are the shareholders?
  • What will be the private limited company’s place of business and its legal address?
  • How will the company be run?

In addition to the above, a precondition for founding a commercial association is opening a starter account and depositing start-up capital. Only thereafter can an application be filed to register the company with the Commercial Register.

What documents are required for establishing a commercial association?

You will have to file the following documents in order to found a commercial association:

  • memorandum of association;
  • articles of association;
  • application;
  • names, personal identification codes and addresses of the members of the management board, auditor and controller, as well as for members of the supervisory board if the commercial association has a supervisory board;
  • notarized signature samples for members of the management board;
  • contact details;
  • proof of payment of the contribution of share capital and state fee.

How to register a new commercial association?

A commercial association can be registered only through a notary public who will prepare the foundation documents you will need. Notary offices will also have samples of documents necessary for establishing a commercial association.

Find a suitable notary and contact details from this list

What are the costs of founding a commercial association?

To establish a commercial association, you will have to pay a state fee of 140.60 euros. If share capital amounts to 2,500 euros, the notary fee for founding a commercial association is 42.18 euros. The cost of making a first transcript in the amount of 16 euros is added to the amount specified above. VAT will be added to all of the notary fees.

How much time will it take to establish a commercial association?

Registering a company through a notary will take 2-3 days.

What must be done after registering a commercial association?

Depending on the company’s area of activity and size, a varying number of additional steps must be taken.

  • If you will be operating in an area of activity subject to special requirements, you will have to apply for an activity license.
  • If your planned annual turnover exceeds 16 000 euros, you will have to register as a VAT payer with the Tax and Customs Board.
  • If you hire employees, they must be registered in the  employment register
  • If you hire employees, you will have to notify the Labour Inspectorate that the commercial association has started operating.

Last amended: 21-01-2016 12:28 | Compiled by: Ministry of Justice