Partnership and business formation laws in Estonia.

Default partnership rules in Estonia

Under Estonian law, a täisühing (general partnership) distributes profits proportionally to each partner's contribution by default, unless the partnership agreement provides otherwise (Commercial Code §89). Partners are jointly and severally liable for partnership debts. The partnership must be registered in the Estonian Commercial Register. A partnership agreement is not legally required but is recommended. Estonian partnership law is codified in the Commercial Code (Äriseadustik).

In Estonia, profits are split proportionally to capital contributions by default. This means a partner who invested 80% of the capital would receive 80% of the profits. While this may seem more intuitive than the equal-split default in some countries, it still fails to account for non-cash contributions like time, expertise, and relationships. A written partnership agreement should address all types of contributions.

Osaühing (OÜ) in Estonia

The OÜ (Osaühing) is the standard entity for Estonian startups. Since 2023, minimum share capital is just €0.01 per shareholder, though founders bear personal liability for any shortfall up to €2,500 if the company becomes insolvent. Registration costs €190 online through the Estonian Business Register or €265 by paper. Online registration can be completed in hours. Shares are transferred by a notarized agreement or digitally through the e-Business Register. The articles of association (põhikiri) govern the company; a shareholders' agreement is recommended but not required.

Without a shareholders' agreement, the relationship between founders is governed by the country's default rules, which rarely account for the realities of a startup — where contributions change over time and early effort often goes uncompensated. An operating agreement or shareholders' agreement is essential. Use our equity calculator to determine a fair split based on actual contributions.

What happens when a partner leaves in Estonia

In a täisühing, a partner can withdraw with six months' notice. The partnership is dissolved by the death or bankruptcy of a partner unless the agreement says otherwise. For OÜ companies, share transfers require notarized form (or digital signature through the e-Business Register). The Commercial Code provides limited minority shareholder remedies; shareholders holding at least 1/10 of share capital can request a special audit.

A written agreement should address departure terms specifically, including how the buyout value is calculated, the payment timeline, vesting schedules, and any non-compete provisions. Understanding the concept of dead equity is important for managing these situations. Learn more about how dead equity affects businesses.

Marriage and business equity in Estonia

Estonia's default matrimonial regime is joint ownership of property acquired during marriage. Business interests started during the marriage are joint property. Spouses can choose a different regime (contractual property or separate property) through a marital property contract registered in the Marital Property Register. Pre-marital business interests remain separate property, but income from them during the marriage may be joint property. Estonian courts enforce marital property contracts.

Formation and cost details

Frequently asked questions

Related resources

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• Does your small business need an equity agreement?
• Equity for small businesses: the complete guide
• Dead equity calculator: how much is yours costing you?
• Slicing Pie calculator
• What is an operating agreement?
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• US state directory: partnership and LLC default rules