On 4 June 2008, the Riigikogu passed the Commercial Code, Non-Profit Associations Act and Associated Acts Amendment Act. The amendment allows, when a company is founded by electronic means or via a notary, to pay in capital immediately to the start-up account of the legal person being founded, doing so either through the Company Registration Portal of the commercial register or through a notary. Previously, capital could be paid in only via a court deposit account or personally in a bank. Under the new procedure the representatives of a company only have to turn up in a bank when they wish to dispose of the funds in the start-up account. To do so, they have to conclude a settlement contract with the bank. To manage the potential risks that may accompany the simplified procedure of opening a bank account a provision is added to the Money Laundering and Terrorist Financing Prevention Act, listing the conditions that have to be met in order to open a start-up account through the Company Registration Portal of the commercial register or through a notary and make a capital contribution to this account. These conditions are: 1) only the founder may pay share capital to the account; 2) the account from which the contribution comes must be in the same bank where the start-up account of the company to be founded is opened; 3) no funds may be taken from the account until the company has been entered in the commercial register and a settlement contract has been concluded in the bank office. As another innovation, annual reports will have to be submitted electronically to the court maintaining the register. The new obligation shall first apply to annual reports prepared for the period commencing on 1 January 2009. Until then annual reports may be filed both on paper and electronically. Going electronic speeds up the disclosure of annual reports. These amendments also make annual reports of non-profit associations public. All information concerning the registration of sole proprietors will start to be kept in the commercial register as a result of the changes. Most of the amendments shall enter into force on 1 January, 2009. Some will enter into force on 1 January 2010.
For further information please contact Raino Paron, Partner at Raidla Lejins & Norcous in Tallinn.