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How is an Estonian company managed?

Last updated: May 30, 2023

You are the sole shareholder and management board member of the company, owning 100% of the shares and having the full control.

An OÜ is the simplest format to run your micro business. According to the law, by default an OÜ is managed by it's shareholders and management board members.

  • Shareholders have the ultimate decision making power in the company. They are the ones who founded the company in the first place. During the course of business activities they can decide to amend the Articles of Association, increase/reduce share capital, elect/remove members of the management board, approve the annual report and distribute profit, decide on dissolution of the private limited company etc.

  • The management board is the managing body of the company which represents and manages the company, and takes official responsibility for the activities. There is a legal distinction between an official role as a "management board member" and an unofficial role as a "manager", "director" or similar. The first one comes with the legal rights and obligations valid outside the company as well, but the latter one is for internal or promotional purposes only.

Since you are both the sole shareholder and management board member of the company, fulfilling both roles at the same time, you are fully in charge and don't have to bother with the official distinction of decision making rights between the shareholders and the management board members, or the internal reporting requirements. In other words, in case of a single-member company, the corporate governance rules and processes are simplified - a benefit for you. And it's up to you which title (CEO, manager, director, etc) you use on your business card.

Please keep in mind that the legal power to manage your company comes with equal responsibility. By law, the founders of a private limited company and the members of the management board shall be liable for damage caused to the private limited company by their action or inaction.

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