The compulsory dissolution of a commercial association takes place on the basis of a court decision.
There may be various reasons for a compulsory dissolution; in general the reason is that the company or its activities do not conform to legislation. If it is possible to eliminate deficiencies related to the company, the court shall grant a term before making a compulsory dissolution decision. This term allows you to eliminate deficiencies and continue the company’s activities.
Reasons for compulsory dissolution
- shareholders did not adopt a dissolution resolution, even though they were required to do so;
- the powers of the management board expired two years ago, but a new management board was not elected;
- the company’s share capital no longer conforms to the requirements specified in legislation.
In addition, compulsory dissolution may be based on other reasons arising from legislation.
Compulsory dissolution process
Submit an application for compulsory dissolution of the commercial association to the county court that has jurisdiction over the location in which the association is registered. The application can be submitted by the management board of the association, the supervisory board, a member of the management board, a member of the supervisory board, a member of the association, as well as other persons specified in legislation. A compulsory dissolution may also be initiated by a court.
Attach the resolution on dissolution of the members of the association together with the minutes of the general meeting to the application.
Compulsory dissolution enters into force as of the entry into force of the relevant court decision. The court sends the corresponding information to the business register for making an entry of dissolution.
If the court decides on liquidation, the compulsory resolution on dissolution is followed by the liquidation of the commercial association. Read about liquidation on the voluntary dissolution page.
Deletion of a commercial association from the register without dissolution
There is an exceptional procedure for the deletion of a commercial association from the register due to failure to submit an annual report.
Where a commercial association has not submitted an annual report to the registrar within the time limit provided by law, the registrar sets a time limit for the commercial association for submission of the annual report with a warning on deletion from the register. In addition, the registrar publishes in the publication Ametlikud Teadaanded a notice for creditors concerning the deletion of the company from the commercial register.
Where a commercial association has also not submitted its annual report within the time limit set by the registrar and at least three months have passed since the due date for submission provided by law, the commercial association may be deleted from the register if certain conditions are fulfilled. A commercial association may be deleted from the register if:
- it has no assets according to the land register, ship registry, commercial register and Estonian register of securities;
- it is not a party to any on-going court proceedings, criminal proceedings or enforcement proceedings;
- the persons and authorities designated by law have provided their consent for deletion from the register.
Where a company that is subject to the obligation to appoint a contact person has not appointed a contact person, the registrar commences, under the same terms and conditions, proceedings for the deletion of the legal person due to lack of contact person.
The registrar may reinstate a commercial association deleted from the register to the register for continuation of activities if the commercial association submits the missing data. A petition for reinstatement to the register may be submitted within three years after deletion.
Related articles
Laws
- Code of Civil Procedure
- Bankruptcy Act
- Commercial Associations Act
- Accounting Act
- Commercial Code
- Penal Code