A public limited company is compulsorily dissolved on the basis of a court order. There can be various reasons for compulsory dissolution, usually due to non-compliance of the public limited company or its activities with legislation. If it is possible to eliminate the circumstance or defect that is the basis of the compulsory dissolution, before deciding on the compulsory dissolution of the public limited company, the court sets a deadline for the public limited company, during which it is possible to eliminate the defect and continue its activities afterwards.
Reasons for compulsory dissolution
The most common reasons for compulsory dissolution:
- the shareholders have not adopted the resolution on dissolution, although its adoption was mandatory;
- the term of office of the management board ended two years ago and a new management board has not been elected;
- the net assets of the public limited company have fallen below the minimum stipulated by law or are less than half of the required share capital.
Other cases provided by law.
Compulsory dissolution process
Submit an application for the compulsory dissolution of the public limited company to the court. The application may be submitted by the management board, the supervisory board, a member or members of the management board, shareholders, as well as other persons specified in the law. The application for compulsory dissolution must be submitted to the county court that has jurisdiction over the location in which the public limited company is registered.
A compulsory dissolution may also be initiated by a court.
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 public limited company. Read about liquidation on the voluntary dissolution page.
Deletion of a public limited company from the register without dissolution
There is an exceptional procedure for the deletion of a public limited company from the register due to failure to submit an annual report.
Where a public limited company has not submitted an annual report to the registrar within the time limit provided by law, the registrar sets a time limit for the public limited company 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 public limited company 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 public limited company may be deleted from the register if certain conditions are fulfilled. A public limited company 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 public limited company deleted from the register to the register for continuation of activities if the public limited company submits the missing data. A petition for reinstatement to the register may be submitted within three years after deletion.