The Ministry of Justice and Digital Affairs has prepared an extensive draft act amending the Commercial Code and other legislation. Its aim is to make the incorporation and management of companies and registry procedures more flexible, while also resolving issues that have caused disputes in practice.
Although many of the amendments are technical or clarifying in nature, some would have a significant practical impact on companies, shareholders and management bodies. The most important change concerns the list of shareholders of private limited companies and the transfer of shares.
Transfers of private limited company shares would no longer depend on a registry entry
Under the current rules, the transfer of a share in a private limited company is generally deemed to have taken place once the change of shareholder has been entered in the Commercial Register. The draft act proposes abandoning this system, which was introduced in 2023.
In future, ownership of a share would transfer at the time agreed in the transaction rather than when the registry entry is made. This should facilitate faster transfers of shares and resolve situations where a transfer remains unregistered because the management board is inactive or absent.
The management board of a private limited company would once again maintain the list of shareholders. The list would be published in the public file of the Commercial Register, and a notary would be required to submit details of a notarised transaction to the register without delay. For private limited companies subject to the notarisation requirement, the published list of shareholders would remain reliable, and it would still be possible, under certain conditions, to acquire a share in good faith.
The amendment would simplify share transfers but increase the management board’s responsibility for ensuring that the list of shareholders is accurate. The registrar would no longer substantively verify the information published in the public file.
The new rules governing lists of shareholders are planned to apply from 1 February 2028. Existing registry data would be transferred automatically to the public file, and companies would not need to submit a separate application.
Shareholders gain broader rights to information about subsidiaries
The draft act clarifies the right to information, which has caused considerable disputes in practice. Shareholders of private and public limited companies would have an express right to request information from the management board about the company’s subsidiaries.
The management board would have four weeks to respond to an information request. It could refuse to provide information if, among other reasons, the parent company’s management board is unable to obtain the requested information from a subsidiary. However, the management board would have to substantiate this.
If the management board refuses to provide the information or fails to respond by the deadline, the shareholder would have three months to apply to court. Shareholders of public limited companies would also gain the right to request copies of the special audit report and annual report.
Companies gain more flexibility in organising meetings
The articles of association of private and public limited companies could in future set a quorum requirement that is either higher or lower than the statutory requirement. Currently, the articles of association can generally only provide for a higher quorum than required by law.
Email would become the primary method for sending meeting notices. The requirement for a public limited company to publish a general meeting notice in a national daily newspaper would be replaced by publication in Ametlikud Teadaanded, Estonia’s official online publication for public notices. Shareholders who have notified the company that they wish to receive notices by post would retain that option.
If a meeting is convened at the request of a shareholder, supervisory board or auditor, it must be held with the requested agenda and within the statutory time limit. When a resolution is adopted without convening a meeting, shareholders or supervisory board members must be given a reasonable period in which to form and submit their views.
The deadline for challenging resolutions becomes stricter
If a shareholder considers that a company resolution breaches the law or the articles of association, they may apply to court to have the resolution set aside. Under the draft act, such a claim would generally have to be filed within three months of the adoption of the resolution, unless the law provides for an even shorter period.
In practical terms, the three-month period would become a strict final deadline. Currently, it is treated as a limitation period that may be suspended or interrupted in circumstances prescribed by law. Under the draft act, this would no longer be possible: if no court action is brought within three months, the right to seek the setting aside of the resolution would lapse. For example, a claim challenging a resolution adopted on 15 April would generally have to be filed by 15 July at the latest.
A resolution that may be set aside should be distinguished from a void resolution. A void resolution is invalid from the outset because of a particularly serious defect. The draft act clarifies that this consequence may arise, for example, from a material breach of the procedure for convening a meeting or adopting a resolution without holding a meeting. A resolution may also be void if the minutes of the meeting have not been notarised where notarisation is required by law.
Companies should therefore carefully follow the requirements for convening meetings, written voting and documenting resolutions, and retain records that make it possible to demonstrate later that a resolution was duly adopted.
Management bodies face fewer formal requirements
The draft act would reduce several formal requirements relating to management bodies:
- a public limited company’s supervisory board would be required to meet at least once every six months rather than once every three months;
- the minutes of a supervisory board meeting would only need to be signed by the chair of the meeting and the person taking the minutes;
- the requirements for voting records for written supervisory board resolutions would be simplified;
- a holder of a commercial procuration (prokurist) could terminate the procuration regardless of the reason by notifying the body that granted it;
- the rules on who represents a company in legal disputes with a member of its management or supervisory board would be clarified.
If a company’s financial situation deteriorates significantly, the company could reduce a management board member’s remuneration or other benefits by means of an out-of-court declaration. Even after the reduction, the remuneration would have to remain reasonably proportionate to the management board member’s duties and the company’s financial situation. The management board member would retain the right to challenge the reduction in court or to terminate their contract extraordinarily by giving one month’s notice.
Incorporation and capital changes involve fewer formalities
For cash contributions of up to €50,000, a management board confirmation that the contribution has been made would be sufficient when incorporating a private limited company or increasing its share capital. In such cases, it would not be necessary to open a payment account in the name of the company being incorporated. “Payment account” is a new term; the current Commercial Code uses the term “bank account”. At the same time, the option to open a temporary payment account through the e-Business Register would be abolished.
The memorandum of association and resolutions to increase the share capital of a private or public limited company would no longer need to specify where payment for shares is to be made. When designating different classes of shares, the Estonian-Latin alphabet would have to be used so that the share classes can be correctly recorded in the Commercial Register.
Instead of an individual auditor, the name and registry code of the audit firm would be entered in the register. It would therefore no longer be necessary to provide the personal identification code of a specific sworn auditor.
What should companies prepare for if the proposed amendments take effect?
If the draft act is adopted, companies should review:
- quorum requirements and meeting rules in their articles of association;
- contact details of shareholders and supervisory board members;
- procedures and templates for convening meetings and adopting written resolutions;
- procedures for handling shareholders’ information requests;
- responsibilities for keeping the management board’s list of shareholders up to date;
- provisions in share transfer agreements governing when ownership of a share passes.
The overall direction of the draft act is to reduce unnecessary formal requirements and make companies’ internal administration more flexible. At the same time, some responsibility would shift from the registrar back to companies and their management boards. Less regulatory oversight would therefore not necessarily mean less work: companies would need to take greater responsibility for keeping their internal processes, contact details and shareholder lists up to date.
This article is based on the version of the draft act dated 30 June 2026. The proposed rules are not yet in force, and both the content of the draft act and the dates on which the amendments would take effect may change during the legislative process.
