Establishing a general partnership and limited partnership
- What must be done before establishing a general partnership or limited partnership
- What documents do you need for founding a general partnership or limited partnership
- How to register a new general partnership or limited partnership
- What are the costs involved in establishing a general partnership or limited partnership
- How long will it take to establish a general or limited partnership
- What must be done after establishing a general partnership or limited partnership
General partnerships and limited partnerships are fairly uncommon forms of business in Estonia. They are suitable when a larger number of stakeholders are involved or for supporting the economic activity of shareholders.
The advantages of a general partnership or limited partnership are the following:
- simple and rapid registration
- no minimum capital requirement.
Before foundation, 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 partners?
- What will be the company’s place of business and its legal address?
- How will the company be run?
A general partnership must have at least two partners who act under a common business name and bear unlimited joint and several liability for the company’s obligations. A general partnership operates on the basis of an association agreement entered into between the partners. The association agreement does not have to be notarized or submitted to the Commercial Register.
In a limited partnership, two or more persons are active under a common business name. At least one of the persons is a general partner who has unlimited liability for the partnership’s obligations; and at least one is a limited partner who has limited liability in the extent of his or her contribution. To establish either of these forms, you will first need the personal details for the partners. The partners must also be in agreement on the items listed above. If you use a notary to register the company, the notary will prepare the application for establishing the general or limited company.
You can register a general or limited partnership electronically in the Company Registration Portal.
You will need the technical capability for digital signatures (ID card and ID card reader). If your company meets at least the following requirements upon registration, you can save time by registering the general partnership or limited partnership electronically. You can do so if:
- all of the persons involved in establishing the company have a registered place of residence in Estonia;
- all of the founders, other persons related to the registration entry have an ID card and can provide digital signatures.
Founding a general or limited partnership through a notary
To allow the founding of the general or limited partnership to proceed efficiently, first make sure which documents you will need for completing the application process. Notary offices will also have samples of documents necessary for establishing the company.
The state fee for entering a general partnership or limited partnership into the register is 13 euros. If you use the services of a notary to establish the general or limited partnership, you will have to pay a notary fee as well. The fee for notarizing the authenticity of a signature on the application is 12.75 euros. If you would like the notary to prepare a draft application, an additional fee of 18.20 euros will be charged. VAT shall be added to all of the notary fees.
A general or limited partnership can be established in under an hour if you use electronic registration in the Company Registration Portal. Still, budget one business day. Registering a general or limited partnership through a notary will take 2-3 days.
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 40 000 euros, you will have to register as a VAT payer with the Tax and Customs Board.
- If you hire employees, you will have to register them in the employment register.
- If you hire employees, you will have to notify the Labour Inspectorate that the company has started operating.