1. Which law is applicable to the legal capacity and right of representation of a legal entity?
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A legal person shall be governed by the law of the state on the basis of which the legal person is founded. If a legal person is actually managed in Estonia or the main activities of the person are carried out in Estonia, the legal person shall be governed by Estonian law.
Private International Law Act § 14 may be found at https://www.riigiteataja.ee/en/eli/526062017004/consolide
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Private International Law Act § 14 may be found at https://www.riigiteataja.ee/en/eli/526062017004/consolide
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2. What criteria/rules are used to determine the applicable law (for example the law of incorporation or the actual seat)?
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According to Private International Law Act § 14 the applicable law is the law of a state where the company is incorporated.
To companies incorporated abroad Estonian law applies if a legal person is actually managed in Estonia or the main activities of the person are carried out in Estonia.
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To companies incorporated abroad Estonian law applies if a legal person is actually managed in Estonia or the main activities of the person are carried out in Estonia.
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3. Which international conventions have to be respected?
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Estonia has concluded bilateral legal aid agreements with Russia, Ukraine and Poland and multilateral legal aid agreement with Latvia, Lithuania.
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4. Are there international conventions with regard to certain countries?
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Estonia has concluded bilateral legal aid agreements with Russia, Ukraine and Poland and multilateral legal aid agreement with Latvia, Lithuania.
According to the legal aid agreements concluded with Russia, Ukraine, Latvia and Lithuania the applicable law to the legal capacity of a legal person is the law of a state on whose territory the company is incorporated.
According to the legal aid agreements concluded with Poland the applicable law to the legal capacity of a legal person is the law of a state on whose territory the company is located.
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According to the legal aid agreements concluded with Russia, Ukraine, Latvia and Lithuania the applicable law to the legal capacity of a legal person is the law of a state on whose territory the company is incorporated.
According to the legal aid agreements concluded with Poland the applicable law to the legal capacity of a legal person is the law of a state on whose territory the company is located.
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5. Are all companies registered in a public register? What are the effects of registration? (please add a link to the register, if possible)
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Yes, all companies must be registered.
An entry shall be held as correct with regard to a third person, except if the third person knew or should have known that the entry is not correct. An entry shall be deemed not to apply with regard to transactions which are concluded within fifteen days after the entry is made if a third person proves that the third person was not aware nor should have been aware of the content of the entry. If facts which must be entered in the register are not entered in the register, such facts shall have legal effect with regard to a third person only if the third person knew or should have known about them. (§ 34 points 2 and 3 of the Commercial Code).
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An entry shall be held as correct with regard to a third person, except if the third person knew or should have known that the entry is not correct. An entry shall be deemed not to apply with regard to transactions which are concluded within fifteen days after the entry is made if a third person proves that the third person was not aware nor should have been aware of the content of the entry. If facts which must be entered in the register are not entered in the register, such facts shall have legal effect with regard to a third person only if the third person knew or should have known about them. (§ 34 points 2 and 3 of the Commercial Code).
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6. Does a foreign company have to be registered in your public company register?
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If a foreign company wants to permanently offer goods or services in its own name in Estonia, it shall enter a branch in the commercial register (§ 384 point 1 of the Commercial Code).
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7. Who has the legal right of representation of a legal entity?
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Legal representative of the company (member of the management board, liquidator and shareholder) has the right to represent the legal entity if the right of representation is registered at the registry card.
Procurator is authorised to represent the undertaking in concluding all transactions related to economic activities and the right of representation must be registered at the registry card.
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Procurator is authorised to represent the undertaking in concluding all transactions related to economic activities and the right of representation must be registered at the registry card.
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8. Must the right of representation be registered (if yes, please add a link to the register, if possible)?
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Yes, the right of representation must be registered in the registry card of a company. The restrictions on the right of representation must be registered at the registry card.
The registry card of a company is public and it may be accessed free of charge. The detailed information of a company has informative value only and is accessible for the fee. Information about companies can be found from e-Business Register.
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The registry card of a company is public and it may be accessed free of charge. The detailed information of a company has informative value only and is accessible for the fee. Information about companies can be found from e-Business Register.
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9. If the right of representation must be registered, what legal effect does the registration have with respect to third parties?
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The right of representation must be registered. The information in the electronic registry card has legal force and its aim is to ensure legal certainty.
An entry shall be held as correct with regard to a third person, except if the third person knew or should have known that the entry is not correct. An entry shall be deemed not to apply with regard to transactions which are concluded within fifteen days after the entry is made if a third person proves that the third person was not aware nor should have been aware of the content of the entry. If facts which must be entered in the register are not entered in the register, such facts shall have legal effect with regard to a third person only if the third person knew or should have known about them. (§ 34 points 2 and 3 of the Commercial Code).
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An entry shall be held as correct with regard to a third person, except if the third person knew or should have known that the entry is not correct. An entry shall be deemed not to apply with regard to transactions which are concluded within fifteen days after the entry is made if a third person proves that the third person was not aware nor should have been aware of the content of the entry. If facts which must be entered in the register are not entered in the register, such facts shall have legal effect with regard to a third person only if the third person knew or should have known about them. (§ 34 points 2 and 3 of the Commercial Code).
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10. May the rights of the legal representative be restricted? If yes, please explain how (e.g. by laws or the articles of association)?
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For Private Limited companies every member of the management board may represent the private limited company in all transactions unless the articles of association prescribe that some or all of the members of the management board shall represent the private limited company jointly. Joint representation shall apply with regard to third persons only if it is entered in the commercial register (Commercial code § 181 point 1).
For Public Limited Companies the consent of the supervisory board is required for conclusion of transactions which are beyond the scope of everyday economic activities and, above all, for conclusion of transactions which bring about:
1) the acquisition or termination of holdings in other companies; or
11) the foundation or dissolution of subsidiaries; or
2) the acquisition or transfer of an enterprise, or the termination of its activities; or
3) the transfer or encumbrance of immovables or registered movables; or
4) the foundation or closure of foreign branches; or
5) the making of investments exceeding a prescribed sum of expenditure for the current financial year; or
6) the assumption of loans or debt obligations exceeding a prescribed sum for the current financial year; or
7) the granting of loans or the guarantee of debt obligations if this is beyond the scope of everyday economic activities.
The articles of association may prescribe that the consent of the supervisory board of the Public Limited Company shall not be required, or is only required in the cases specified in the articles of association.
However the restrictions on the right of representation of a Public Limited Company described above shall not apply with regard to third person (see § 317 points 1 and 4 of the Commercial Code).
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For Public Limited Companies the consent of the supervisory board is required for conclusion of transactions which are beyond the scope of everyday economic activities and, above all, for conclusion of transactions which bring about:
1) the acquisition or termination of holdings in other companies; or
11) the foundation or dissolution of subsidiaries; or
2) the acquisition or transfer of an enterprise, or the termination of its activities; or
3) the transfer or encumbrance of immovables or registered movables; or
4) the foundation or closure of foreign branches; or
5) the making of investments exceeding a prescribed sum of expenditure for the current financial year; or
6) the assumption of loans or debt obligations exceeding a prescribed sum for the current financial year; or
7) the granting of loans or the guarantee of debt obligations if this is beyond the scope of everyday economic activities.
The articles of association may prescribe that the consent of the supervisory board of the Public Limited Company shall not be required, or is only required in the cases specified in the articles of association.
However the restrictions on the right of representation of a Public Limited Company described above shall not apply with regard to third person (see § 317 points 1 and 4 of the Commercial Code).
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11. Does that restriction have any legal effect towards third persons?
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The restrictions described under question 10 have legal effect towards third persons only if they are entered into the registry card.
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12. How can the representative prove the right of representation (e.g. extract in paper from the registry certified by some authorities, extract from public registry)?
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Extract from the registry card may be obtained by everyone free of charge electronically from e-Business Register at https://ariregister.rik.ee/index?lang=eng in Estonian and in English. Notaries may issue certified copies from the registry card of a company but updated information is available in e-Business Register.
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13. Are there any circumstances where the transactions entered into by the legal representative of a company are considered not binding on the company (e.g. for a valid transaction should there be a decision or consent of the shareholders, supervisory body)? If yes, please explain.
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An entry shall be held as correct with regard to a third person, except if the third person knew or should have known that the entry is not correct. An entry shall be deemed not to apply with regard to transactions which are concluded within fifteen days after the entry is made if a third person proves that the third person was not aware nor should have been aware of the content of the entry (§ 34 point 2 of the Commercial Code).
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14. Is it possible to verify the right of representation by digital means from the register? Please indicate the source and in which language the inquiries should be conducted.
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Extract from the registry card may be obtained by everyone free of charge electronically from e-Business Register at https://ariregister.rik.ee/index?lang=eng in Estonian and in English.
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15. When anti-money laundering measures are applied, how are the beneficial owners of a legal entity registered in your country identified? Would there be different possibilities for professionals from other countries to identify the beneficial owners? Please indicate the source and in which language the inquiries should be conducted.
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The information on beneficial owners and the history of beneficial owners is public and may be obtained electronically from e-Business Register at >https://ariregister.rik.ee/index?lang=eng in Estonian and in English for a fee.
The list of shareholders on companies whose shares are not registered (Private Limited Companies) is kept by the management board of the company. The shareholders for those companies (most Private Limited Companies) may also be seen on the informative part of the commercial registry for a fee in the e-Business Register at https://ariregister.rik.ee/index?lang=eng in Estonian and in English.
The list of shareholders of Public Limited Companies and Private Limited Companies, whose shares are registered may be obtained from the central securities depository. ID-card, Mobile ID or internet banks authorisation is needed to log in to the web service https://ereg.nasdaqcsd.com/SecureWeb/login.screen and service agreement must be concluded for obtaining the information. The information on shareholders is for a fee https://ereg.nasdaqcsd.com/SecureWeb/individual/shrequests_frontpage.do.
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The list of shareholders on companies whose shares are not registered (Private Limited Companies) is kept by the management board of the company. The shareholders for those companies (most Private Limited Companies) may also be seen on the informative part of the commercial registry for a fee in the e-Business Register at https://ariregister.rik.ee/index?lang=eng in Estonian and in English.
The list of shareholders of Public Limited Companies and Private Limited Companies, whose shares are registered may be obtained from the central securities depository. ID-card, Mobile ID or internet banks authorisation is needed to log in to the web service https://ereg.nasdaqcsd.com/SecureWeb/login.screen and service agreement must be concluded for obtaining the information. The information on shareholders is for a fee https://ereg.nasdaqcsd.com/SecureWeb/individual/shrequests_frontpage.do.
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