Single vs. multi-shareholder company

If you are a freelancer, consultant, digital nomad or other form of a digital solopreneur, you're probably considered a single-shareholder company as you are the only founder.

If you instead have co-founders, like in the case of some consulting agencies or startups, you're a multi-shareholder company. 

First, familiarize yourself with the business structures available - here is a comparison of all business structures. The below advice is specific to a private limited company, or OÜ, the most common form of business both in Estonia and chosen by e-residents. 

Single-shareholder OÜ

Registration is as detailed in our Start a Company article.

Single-shareholder companies are at a bit of an advantage as many of the service providers in our Marketplace - including Estonian banks - prefer to work with companies of this type as they tend to be highly visible online and it is relatively simple to monitor any risks associated.

Multi-shareholder OÜ

Registration is essentially the same as a single-shareholder OÜ, but your co-founders will likely need to also apply for e-Residency before you register your company. Here's why:

  • Registration: To register your OÜ online, your co-founders will need a digital ID card valid in Estonia. This can be an Estonian, Latvian or Belgian ID card, Lithuanian mobile ID or e-Residency digital ID card. As an alternative to online registration, any OÜ can also be registered through a notary, though this will require a trip to Estonia for you and your co-founders.
  • Management board: All OÜ must have a management board, a directing body to represent and direct the company. The management board may have one or several members, though it's likely your co-founders will want to be included. All members of the board must have a digital ID valid in Estonia in order to register and manage the OÜ online.

Other considerations:

  • 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 (you can see this easily by using the compare buttons) as they can also provide advice and assistance based on your specific situation.
  • Share capital contribution: Be sure your team understands how share capital contribution works - dividends can only be paid once the share capital has been registered, so you'll want to agree on how to proceed.

 

 

 

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