A private limited company is a company that has its share capital divided into private limited company shares. A private limited company is liable for the performance of its obligations with all of its assets, but a shareholder is not personally liable for the obligations of the company. The minimum nominal value of a share is 1 EUR and the share capital must be a minimum of 2,500 EUR. If the founders are private persons and the share capital is less than 25,000 EUR, they can decide whether to pay their share when establishing the company.
Until the whole sum has been paid, the founders are personally liable for the obligations of the company up to the amount of the missing contribution. A private limited company must have a management board – a directing body that represents and directs the private limited company. The management board may have one member or several members and they must be natural persons with active legal capacity without the obligation to hold shares from the company.
If more than half of the board members do not permanently reside in Estonia, the company must give the Commercial Register a contact name and address in Estonia where necessary documents can be sent. The foreign owner must give the Commercial Register his/her address and e-mail address. Although not mandated by law, a private limited company may have a supervisory board if prescribed by the Articles of Association. An auditor, who can be prescribed by law or Articles of Association, is mandatory when the company surpasses certain threshold values in terms of turnover, number of employees and asset value.