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Supervisory Board

The Supervisory Board (“SB”) is part of an organizational structure which includes 2 governing bodies in the Company, the other governing body being the Executive Board (“EB”). The two-tier management system is optional for the Private Limited Liability Company (in Estonian: “Osaühing” or “OÜ”) (“Private LLC”).

Division of Duties: In broad terms, the SB is responsible for the “general strategic” guidance and supervision of the Company, while the EB is responsible for the “daily” management of the Company. Consent of the SB is required for transactions which are beyond the scope of everyday economic activities. The SB elects members of the EB and supervises its activities. The SB is not responsible for the business of the Company, but may be liable for resolutions, which caused damage to the Company.

[...]

Composition: The SB consists of at least 3 members, whereas the total number of members is not limited. The SB may consist of only natural persons and may not include any EB members. The SB shall elect a Chairman from among themselves, who shall be responsible for organizing the activities of the SB.

Appointment/Dismissal Competence: SB members are appointed and recalled by the General Meeting (“GM”). The candidates who received most votes are deemed to be elected. Recalling is determined by a majority vote of 2/3. The Articles of Association (“AoA”) may stipulate that up to half of the members are appointed and recalled according to a different procedure. SB members may be appointed for a term of up to 5 years and reappointed for an unlimited number of times.

Alternates: Not applicable.

For a description of how to change the respective board members, please see the individual steps in the "Step-by-Step"-schedules below. As all information on how to change board members in Estonia on the CBM Site by nature is generic (i.e. does not include specific requirements for listed companies, special requirements in statutory documents or as otherwise stipulated in any type of special law), we strongly recommend seeking legal advice with Ellex Raidla before actually changing any board members in Estonia.

Appointment
Step Action Documentation Signatures? Timing Originals? Notarization/
Certification?
Waiver of
Step?
Miscellaneous
1

Convening of GM.

(i) Convening notice;

(ii) Draft Resolutions.

No.

At least 1 week prior to the GM (unless the AoA prescribes a longer period).

No.

No.

Yes, but only if (i) voting is to take place without a physical meeting to a Record of Voting (only allowed in Private LLCs) or (ii) a Shareholders’ Resolution is to be adopted unanimously without voting (cf. Step 2).

Notice to be sent to all Shareholders, who are registered in the Shareholders Register. If a Public LLC has more than 50 Shareholders, no personal notices are to be sent, however a notice shall be published in a national daily newspaper.

2

GM.

(i) Minutes of the GM;

(ii) List of participating Shareholders.

Yes, Minutes of the GM and list to be signed by the Chairman and the Secretary of the GM. Further, list to be signed by the participating Shareholders (or their representatives).

At the date stipulated in the convening notice, (unless waived, cf. Step 1).

Yes.

Minutes to be notarized (does not apply to Private LLCs). In case of a Sole Shareholder, the signatures must be either notarized or digital.

Yes, (i) voting may take place without a physical meeting to a Record of Voting (only allowed in Private LLCs) or (ii) a Shareholders’ Resolution may be adopted without voting if adopted unanimously and signed by all Shareholders.

The authorities of the SB members become effective as of the date of the appointment, regardless of the filings with the Commercial Register (cf. Step 3).

3

Filing with the Estonian Commercial Register.

(i) Consent of the new SB Member;

(ii) Updated list of SB members;

(iii) Either: (a) Minutes of the GM and list of participating Shareholders; (b) Record of Voting; or (c) Shareholders’ Resolution (cf. Step 2).

Yes, consent to be signed by the new SB member and list of SB members to be signed by an EB member.

Record of Voting (if applicable) to be signed by an EB member or a Shareholder and Shareholders’ Resolution (if applicable) to be signed by all Shareholders.

No later than 5 business days as of the appointment of the SB member.

Yes.

Yes, notarized or digital signatures are required for the Record of Voting (if applicable) or the

Shareholders’ Resolution (if applicable).

No.

All documents, which may be signed digitally can be submitted online.

1
Step 1
0-1 week*
2
Step 2
0 days
3
Step 3
0-5 days

0-12 days**

*Less than 1 week only possible if Step 1 is waived.

**Notarization may take additional time.

Dismissal
Step Action Documentation Signatures? Timing Originals? Notarization/
Certification?
Waiver of
Step?
Miscellaneous
1

Convening of GM.

(i) Convening notice;

(ii) Draft Resolutions.

No.

At least 1 week prior to the GM (unless the AoA prescribes a longer period).

No.

No.

Yes, but only if (i) voting is to take place without a physical meeting to a Record of Voting (only allowed in Private LLCs) or (ii) a Shareholders’ Resolution is to be adopted unanimously without voting (cf. Step 2).

Notice to be sent to all Shareholders, who are registered in the Shareholders Register. If a Public LLC has more than 50 Shareholders, no personal notices are to be sent, however a notice shall be published in a national daily newspaper.

2

GM.

(i) Minutes of the GM;

(ii) List of participating Shareholders.

Yes, Minutes of the GM and list to be signed by the Chairman and the Secretary of the GM. Further, list to be signed by the participating Shareholders (or their representatives).

At the date stipulated in the convening notice, (unless waived, cf. Step 1).

Yes.

Minutes to be notarized (does not apply to Private LLCs). In case of a Sole Shareholder, the signatures must be either notarized or digital.

Yes, (i) voting may take place without a physical meeting to a Record of Voting (only allowed in Private LLCs) or (ii) a Shareholders’ Resolution may be adopted without voting if adopted unanimously and signed by all Shareholders.

The authorities of the SB members terminate as of the date of the dismissal, regardless of the filings with the Commercial Register (cf. Step 3).

3

Filing with the Estonian Commercial Register.

(i) Updated list of SB members;

(ii) Either: (a) Minutes of the GM and list of participating Shareholders; (b) Record of Voting; or (c) Shareholders’ Resolution (cf. Step 2).

Yes, list of SB members to be signed by an EB member.

Record of Voting (if applicable) to be signed by an EB member or a Shareholder and Shareholders’ Resolution (if applicable) to be signed by all Shareholders.

No later than 5 business days as of the dismissal of the SB member.

Yes.

No.

No.

All documents, which may be signed digitally can be submitted online.

1
Step 1
0-1 week*
2
Step 2
At the date stipulated in the convening notice, (unless waived, cf. Step 1).
3
Step 3
0-5 days

0-12 days**

*Less than 1 week only possible if Step 1 is waived.

**Notarization may take additional time.

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Ellex Raidla has provided all input about changing board members in Estonia. Ellex Raidla is a leading [...] and the highest ranked law firm in Estonia, established in 1993. Ellex Raidla is one of the few firms in Estonia that is endorsed in Band 1/Tier 1 category by all the major law firm directories and the only firm that is endorsed in Band 1 by Chambers Europe in both areas – disputes and transactions. Ellex Raidla belongs to a circle of strongest law firms of the Baltics – Ellex.

For more information about Ellex Raidla and changing board members in Estonia, please use the below contacts:

TEL: +372 6407 170
EMAIL: sven.papp@ellex.ee
WEB: www.ellex.ee/en