Single vs. multi-shareholder company

A company is considered single-shareholder if it has only one founder. This is usually the case for freelancers, consultants, digital nomads and other forms of digital solopreneurs. If, however, a company has several co-founders, it is a multi-shareholder company. 

Although the Estonian Commercial Code (Äriseadustik) distinguishes between six forms of business entities (please see a comparison on the State portal), a private limited company (OÜ) is the most common form of business among both Estonian residents and e-residents. The below advice is specific to a private limited company, or OÜ.

Single-shareholder OÜ

The registration process of a single-shareholder OÜ is simple and straightforward. It is described in detail in the State portal and also in our Start a Company article. With an e-Residency digital ID card you can register your company online from anywhere in the world.

Multi-shareholder OÜ

If all co-founders of a multi-shareholder company are able to give digital signatures (they have an e-Residency digital ID card or an Estonian, Latvian, Finnish or Belgian ID card), then the online registration process of a multi-shareholder OÜ is essentially the same as a single-shareholder OÜ. As an alternative to the online registration, any OÜ can also be registered through a notary, though this would require a trip to Estonia for you and your co-founders.

When registering a multi-shareholder company online, all shareholders and their specific shares in the capital should be indicated in the Shareholders section of the company registration application. Those shareholders who hold more than 25% in the company should also be specified as beneficial owners in the respective section. 

All OÜ must have a management board, a directing body to represent and manage the company. The management board may have one or several members, though it's likely your co-founders will want to be included. Board members who are not founders can also be appointed. 

If all shareholders are private persons, you may establish the company without a share capital contribution at incorporation. Be sure your team understands how share capital contribution works . If you choose to contribute share capital at incorporation, a start-up account should be opened and all shareholders should transfer their agreed contributions to the start-up account. If the articles of incorporation provide for the possibility of non-monetary contributions, shareholders should act accordingly.

Please note that in case of the sale of shares by one of the shareholders, other shareholders have a pre-preemptive right to purchase them unless the articles of association foresee otherwise. Commercial code sets voting thresholds for major types of corporate resolutions. These thresholds can be modified in the articles of association. If necessary, the shareholders’ agreement can be concluded as well.

Not all service providers work with multi-shareholder companies so make sure to check this when you are researching potential business partners. In the e-Residency Marketplace, you can filter service providers by which company types they serve.

Other considerations:

  • Corporate shareholders: Please note that a company can be registered online only if all founders are private persons. In case one or more of the founders are legal entities, your Estonian company must be registered through a notary office in Estonia and share capital shall be contributed at incorporation before the registration process is finalised.

  • Banking: Review our Banking Basics article for an overview of options. We recommend finding a service provider in our Marketplace that specializes in companies other than single-shareholder as they can also provide advice and assistance based on your specific situation.
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