Commercial Law, Corporate Law and M&A
Business and company law concerns the formation, management and restructuring of companies, relations between owners, the liability of management board members and the purchase and sale of businesses. Clear articles of association, members’ or shareholders’ agreements and well prepared transactions help to reduce disputes and protect the interests of the company and its owners.
A company’s legal structure determines how decisions are made, how profit is distributed, how investors are brought in, how holdings are sold and how obligations are assumed. Problems often arise when the articles of association are too general, the owners have no written agreements or the rights and duties of the governing body have not been thought through in enough detail.
Law Firm Namm helps to prepare and amend articles of association, members’ and shareholders’ agreements, resolutions of the management board and supervisory board and Commercial Register documents. We also advise on the liability of management board members, disputes between members, sale of holdings, restructuring, division, transformation and liquidation of companies.
In M&A transactions, we advise buyers, sellers and investors from choosing the transaction structure and carrying out legal due diligence through to the sale and purchase agreement, security arrangements, limitations of liability and completion of the transaction. We work in Estonian, Russian and English.
How we help in business law, company law and M&A transactions
- Formation of companies (private limited company (OÜ), public limited company (AS), general partnership, limited partnership and branch)
- Formation of non-profit associations and foundations
- Preparing and amending articles of association
- Changes to share capital
- Preparing members' and shareholders' agreements
- Advice to the management board and supervisory board
- Matters relating to the liability of members of the management board and supervisory board
- Purchase and sale of companies
- Mergers and acquisitions (M&A)
- Legal due diligence
- Restructuring, merger and division of a company
- Sale and acquisition of a holding
- Withdrawal and exclusion of a member
- Commercial Register procedures and entries
- Resolution of disputes between owners and members of governing bodies
- Day to day business law advice
- Dissolution and liquidation of a company
Frequently Asked Questions
Which business form should I choose, for example OÜ or AS?
The choice of the suitable form depends above all on the nature of the activity, the number of owners, capital needs and future plans. An OÜ is the most common form in Estonia and suits many small and medium sized businesses. An AS is more suitable for larger companies or companies that intend to involve investors. Tax and liability issues should also be considered before a decision is made.
Can I set up a private limited company myself or do I need an attorney-at-law?
A simple OÜ can often be established independently through the electronic Commercial Register. Legal assistance is advisable when there is more than one owner, investors are involved, special rules are needed or future disputes between owners should be avoided. In such cases it is important to think through the articles of association, members’ agreements and management rules before formation.
What is a members' agreement and why is it needed?
A members’ agreement regulates matters between owners that the articles of association often do not cover in enough detail. It can set out decision making, profit distribution, sale of a holding, non-compete restrictions, deadlock resolution and the conditions for an owner to exit. In a company with several owners, it is one of the most important documents for preventing disputes.
What is a management board member liable for?
A management board member must act in the interests of the company with due care, loyalty and in accordance with the law. If duties are breached, personal liability may arise towards the company, creditors or, in certain cases, the state. The risks are higher in cases involving insolvency, tax debts, conflicts of interest and undocumented management decisions.
What should be done if a dispute arises between members or shareholders?
First, it is necessary to assess the articles of association, the members’ or shareholders’ agreement, the decisions made and the real purpose of the dispute. Often a solution can be reached through negotiations, a buyout of a holding or changes to management rules. If no agreement is reached, we help to prepare claims, objections and, where necessary, represent you in litigation.
How does the sale of a company or a holding take place?
The sale of a company usually starts with agreeing the transaction structure and the main terms. Then, where necessary, legal due diligence is carried out, the sale and purchase agreement, price, security arrangements and liability are negotiated and the transfer of the holding or assets is formalised. A well prepared transaction reduces later claims and disputes.
What is legal due diligence?
Legal due diligence is a legal review of a company before a purchase, sale or investment. It covers, for example, corporate documents, contracts, employees, intellectual property, permits, disputes, debts and other risks. The review helps the buyer understand what is being acquired and helps the seller put possible issues in order before the transaction.
When must changes be entered in the Commercial Register?
Changes that must be entered in the Commercial Register include, among other things, a change of management board member, amendment of the articles of association, change in share capital, merger, division, transformation and liquidation. Correct and up to date register entries are important for the management of the company, the right of representation and third parties.
Can another member be excluded from the company?
The exclusion of a member is possible only on grounds provided by law or the articles of association and requires strong legal justification. Usually it must be shown that the member is materially harming the interests of the company or breaching their duties. Before taking such a step, it is worth assessing the evidence, alternatives and the risks of a possible dispute.
How is a company dissolved or liquidated?
Dissolution of a company requires a decision of the owners, appointment of liquidators, notification of creditors, distribution of assets and register procedures. If the company has debts or signs of insolvency, ordinary liquidation may not be possible and bankruptcy or reorganisation risks must be assessed.