Division 2 Reduction of Share Capital

§ 197. Resolution on reduction of share capital

(1)

A resolution on reduction of share capital shall be adopted if at least two-thirds of the votes of the shareholders who participate in the meeting or, in the case specified in subsection 174 (2) of this Code, at least two-thirds of the votes of the shareholders are in favour, unless the articles of association prescribe a greater majority requirement.

(11)

If upon a reduction of share capital there is a desire to reduce the nominal values of shares or to cancel shares other than proportionally with regard to each share, the corresponding resolution shall be adopted if, in addition to the provisions of subsection (1) of this section, the resolution is supported by the shareholders whose shares are disproportionately cancelled compared with other shares, or the nominal values of whose shares are disproportionately reduced.

(17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)

(2)

If the articles of association must be amended due to the reduction of share capital, amendment of the articles of association shall be decided before share capital is reduced, except if share capital is reduced in the case specified in subsection 198 (2) of this Code.

§ 1971. Resolution on reduction of share capital

The following shall be set out in a resolution on reduction of share capital:

1)

the reason for the reduction of share capital;

2)

the extent and method of reduction of share capital;

3)

the new nominal values of shares.

(17.06.98 entered into force 10.07.98 - RT I 1998, 59, 941)

§ 198. Extent of reduction of share capital

(1)

Share capital shall not be reduced below the amount of share capital specified in § 136 of this Code or any other minimum amount of share capital provided by law.

(22.03.2000 entered into force 17.04.2000 - RT I 2000, 29, 172)

(2)

The provisions of subsection (1) of this section and of § 199 of this Code shall not apply if an increase of share capital to at least the amount of share capital specified in § 136 of this Code is decided concurrently with a reduction of share capital. Shares which are issued in such circumstances shall only be paid for in money.

§ 199. Notification of creditors

(1)

The management board shall, within fifteen days after adoption of a resolution on reduction of share capital, send written notice concerning the new amount of share capital to the known creditors of the private limited company who have claims against the private limited company which predate the adoption of the resolution on reduction of share capital.

(2)

The management board shall publish two notices concerning the resolution on reduction of share capital with at least a fifteen day interval in the official publication Ametlikud Teadaanded. The notice shall indicate that creditors are to submit their claims within two months.

(20.06.2000 entered into force 12.07.2000 - RT I 2000, 55, 365)

(3)

The private limited company shall guarantee the claims of creditors if they are submitted within two months after publication of the last notice. If the due date for fulfilment of a claim has arrived or if a claim is not sufficiently guaranteed, the creditor may demand satisfaction of the claim.

§ 1991. Payment of dividends to shareholders

Upon reduction of share capital, dividends may be paid to shareholders if the payment thereof is prescribed by the resolution on reduction of share capital and is carried out not earlier than three months after the reduction in share capital is registered with the commercial register, and provided that the claims submitted by creditors within the specified terms are guaranteed or satisfied.

(22.03.2000 entered into force 17.04.2000 - RT I 2000, 29, 172)

§ 200. Submission of petition to commercial register

(1)

The management board shall submit a petition for entry of a reduction of share capital in the commercial register not earlier than three months after publication of the second reduction of share capital notice. The following shall be appended to the petition:

1)

the resolution of the shareholders;

2)

the new text of the articles of association if the articles of association are amended;

3)

the minutes of the meeting of shareholders or, in the case provided for in § 173 of this Code, the record of voting;

31)

if the shares are entered in the Estonian Central Register of Securities, a notice from the Estonian Central Register of Securities confirming that the management board has notified the register of the reduction of share capital;

(14.06.2000 entered into force 01.01.2001 - RT I 2000, 57, 373)

4)

other documents prescribed by law.

(2)

In the petition, the members of the management board shall confirm that the claims of creditors who submitted their claims during the term or who opposed the reduction are guaranteed or satisfied.

(3)

The share capital shall be deemed to be reduced as of the making of such entry in the commercial register.

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