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.
A commercial association can be established by at least two persons (both legal and natural).
The benefit of a commercial association is the absence of personal liability of its members for the obligations of the association. The articles of association may provide for the full personal liability of the members or, to the extent determined by the articles of association, additional liability.
There is no minimum share capital requirement for the association in the case of full personal liability. Unless the articles of association prescribe the personal liability of the members of the association for the obligations of the association, the share capital of the association shall be at least 2,500 euros.
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?
What documents are required for establishing a commercial association?
You will have to file the following documents in order to found a commercial association:
- application
- memorandum of association;
- articles of association;
- 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;
- contact details;
- proof of payment of the contribution of share capital and state fee.
How to register a new commercial association?
You can register a commercial association only through a notary, who approves the application for entry in the commercial register and prepares the necessary instruments of constitution. The notary who certifies the application shall submit the application together with the documents necessary for making the entry to the commercial register.
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 200 euros. VAT will be added to all of the notary fees.
How much time will it take to register a commercial association?
The registrar of the commercial register shall review the application for registration of the commercial association within 5 working 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 40 000 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.