{"id":6227,"date":"2020-07-23T10:43:06","date_gmt":"2020-07-23T07:43:06","guid":{"rendered":"http:\/\/virtualofficeinestonia.com\/?post_type=ufaq&#038;p=6227"},"modified":"2026-01-11T12:04:20","modified_gmt":"2026-01-11T10:04:20","slug":"what-to-do-with-negative-share-capital","status":"publish","type":"ufaq","link":"https:\/\/virtualofficeinestonia.com\/et\/ufaqs\/what-to-do-with-negative-share-capital\/","title":{"rendered":"What to do with negative share capital (net assets)?"},"content":{"rendered":"<style>div.ewd-ufaq-faq-title h5 { font-size: 12 !important; }div.ewd-ufaq-faq-post p { font-size: 12 !important; }div.ewd-ufaq-faq-categories, div.ewd-ufaq-faq-tags { font-size: 12 !important; }<\/style><div  class=\"ewd-ufaq-faq-list ewd-ufaq-page-type-load_more ewd-ufaq-category-tabs-\" id='ewd-ufaq-faq-list'>\n\n\t<input type='hidden' name='show_on_load' value='' id='ewd-ufaq-show-on-load' \/>\n<input type='hidden' name='include_category' value='' id='ewd-ufaq-include-category' \/>\n<input type='hidden' name='exclude_category' value='' id='ewd-ufaq-exclude-category' \/>\n<input type='hidden' name='orderby' value='title' id='ewd-ufaq-orderby' \/>\n<input type='hidden' name='order' value='desc' id='ewd-ufaq-order' \/>\n<input type='hidden' name='post_count' value='-1' id='ewd-ufaq-post-count' \/>\n<input type='hidden' name='current_url' value='\/et\/wp-json\/wp\/v2\/ufaq\/6227' id='ewd-ufaq-current-url' \/>\n\t\n\t\n\t<div class='ewd-ufaq-faqs'>\n\n\t\t<div  class=\"ewd-ufaq-faq-div ewd-ufaq-faq-column-count-one ewd-ufaq-faq-responsive-columns- ewd-ufaq-faq-display-style-minimalist ewd-ufaq-can-be-toggled\" id='ewd-ufaq-post-6227-3SpxQ5qNRx' data-post_id='6227'>\n\n\t\t\n\t<div class='ewd-ufaq-faq-title ewd-ufaq-faq-toggle'>\n\t\n\t<a class='ewd-ufaq-post-margin'  href='#' role=\"button\">\n\n\t\t<div class='ewd-ufaq-post-margin-symbol ewd-ufaq-square'>\n\t\t\t<span >A<\/span>\n\t\t<\/div>\n\n\t\t<div class='ewd-ufaq-faq-title-text'>\n\n\t\t\t<h5>\n\t\t\t\tWhat to do with negative share capital (net assets)?\t\t\t<\/h5>\n\n\t\t<\/div>\n\n\t\t<div class='ewd-ufaq-clear'><\/div>\n\n\t<\/a>\n\t\n<\/div>\n\t\n\t<div class='ewd-ufaq-faq-body' >\n\n\t\t\n\t\t\t\n\t\t\n\t\t\t<div class='ewd-ufaq-post-margin ewd-ufaq-faq-post'>\n\t\n<p class=\"has-primary-color has-text-color has-link-color has-medium-font-size wp-elements-b8023f40974ff502eb15a27a0e05b11a\"><strong>Negative share capital must be resolved as soon as possible.<\/strong><\/p>\n\n\n\n<p>Below is a practical roadmap that <span style=\"margin: 0px;padding: 0px\">aligns with the requirements of the\u00a0<strong>Commercial Code<\/strong>\u00a0(\u00c4riseadustik) and common market solutions<\/span>.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-wide-thin-line\" \/>\n\n\n\n<h2 class=\"wp-block-heading has-vivid-cyan-blue-color has-text-color has-link-color has-medium-font-size wp-elements-ff07a9080f75f5f102a242e1a2556a52\">1. When is equity \u201ctoo low\u201d?<\/h2>\n\n\n\n<p>Under <strong>Commercial Code \u00a7 176(2),<\/strong> the company\u2019s <strong>net assets must be at least<\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>50\u202f% of registered share capital<\/strong>, ja<\/li>\n\n\n\n<li><strong>not less than the minimum share\u2011capital requirement<\/strong> (currently\u202f<strong>\u20ac\u202f2\u202f500<\/strong> for O\u00dcs).<\/li>\n<\/ul>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong>Example:<\/strong><br>An O\u00dc with a registered capital of \u20ac2\u202f500 must keep equity \u2265 \u20ac2\u202f500 (100\u202f%).<\/p>\n<\/blockquote>\n\n\n\n<p>If the balance sheet shows that equity is below either limit (often expressed as <em>negative share capital<\/em>), the board must<span style=\"margin: 0px;padding: 0px\">\u00a0convene a shareholders&#8217; meeting\u00a0<strong>within three months after approval of the annual report<\/strong><\/span> to decide on remedies.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-wide-thin-line\" \/>\n\n\n\n<h2 class=\"wp-block-heading has-vivid-cyan-blue-color has-text-color has-link-color has-medium-font-size wp-elements-e5f0a3534d62cf96f8376186dde0d49d\">2. Practical ways to restore equity<\/h2>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li><strong>Issue new shares\/owner cash injection<\/strong> \u2013 quickest textbook fix.<\/li>\n\n\n\n<li><strong>Convert shareholder loans into equity<\/strong> (set\u2011off contribution).<\/li>\n\n\n\n<li><strong>Revalue (upwards) real estate or IP<\/strong> \u2013 allowed if a fair\u2011value report substantiates it.<\/li>\n\n\n\n<li><strong>Cut costs &amp; improve margins<\/strong> \u2013 demonstrate turnaround in the next financial year.<\/li>\n\n\n\n<li><strong>Sell non\u2011core assets<\/strong> \u2013 realise gains, book profit.<\/li>\n\n\n\n<li><span style=\"margin: 0px;padding: 0px\"><strong>Reduce share capital to a minimum (\u20ac2\u202f500)<\/strong>\u00a0and cover the rest via profit or later capital increase.<\/span><\/li>\n<\/ol>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong>Tip:<\/strong> Make sure any capital manoeuvre is properly <strong>documented<\/strong>, entered in the <strong>accounting ledgers<\/strong> and registered in <strong>e-Business Register<\/strong>.<\/p>\n<\/blockquote>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-wide-thin-line\" \/>\n\n\n\n<h2 class=\"wp-block-heading has-vivid-cyan-blue-color has-text-color has-link-color has-medium-font-size wp-elements-606cad65516378754d228c3e66fc25a0\">3. Exit scenarios<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Sell the company<\/strong> \u2013 shares can be transferred to a buyer who is willing to recapitalise. Ensure the SPA allocates responsibility for past debts.<\/li>\n\n\n\n<li><strong>Liquidate<\/strong> \u2013 a clean way to close down if there is no buyer or business rationale. Requires publishing a creditor notice and preparing a final balance sheet.<\/li>\n\n\n\n<li><strong>Turnkey liquidation service<\/strong> \u2013 we can handle filings, creditor notices, accounting &amp; tax clearance (fees start around \u20ac300\u2013\u20ac1\u202f000).<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-wide-thin-line\" \/>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\">4. When will the share capital be returned?<\/h3>\n\n\n\n<p>Only the <strong>paid-in share capital<\/strong> <span style=\"margin: 0px;padding: 0px\">may be returned to the owner, and this may occur\u00a0<strong>no earlier than 4 months<\/strong>\u00a0after the liquidation process begins<\/span>. The return can include both the registered share capital and any remaining funds in the company\u2019s bank account, provided all legal obligations have been fulfilled.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-wide-thin-line\" \/>\n\n\n\n<p class=\"has-vivid-cyan-blue-color has-text-color has-link-color wp-elements-444728ffa24861bbe90817e21b0cd5d1\"><strong>NB!<\/strong><\/p>\n\n\n\n<p>In Estonia, for a Private Limited Company (O\u00dc), the \u20ac2,500 minimum share capital requirement was abolished in February 2023, meaning the share capital can be as low as \u20ac0.01; however, founders become personally liable for the difference if assets fall short of \u20ac2,500 in bankruptcy. For a Public Limited Company (AS), the minimum remains \u20ac25,000.<br><\/p>\n\n\n<\/p><\/div>\n\t\t\n\t\t\t<div class='ewd-ufaq-faq-custom-fields'>\n\n\t\n<\/div>\n\t\t\n\t\t\t<div class='ewd-ufaq-faq-categories'>\n\t\n\tCategories:\n\t\n\t\tAccounting\n\t\n\t\tCompany liquitation\n\t\n<\/div>\n\t\t\n\t\t\t<div class='ewd-ufaq-faq-tags'>\n\t\n\tTags:\t\n\t\n\t\tAccounting, \n\t\n\t\tCommercial Code, \n\t\n\t\tEstonia, \n\t\n\t\tShare Capital\n\t\n<\/div>\n\t\t\n\t\t\t<div class='ewd-ufaq-ratings'>\n\t\n\t<div class='ewd-ufaq-ratings-label'>\n\t\tDid you find this FAQ helpful?\t<\/div>\n\t\n\t<div class='ewd-ufaq-rating-button ewd-ufaq-up-vote ewd-ufaq-ratings-default-image' data-faq_id='6227'>\n\t\t<img decoding=\"async\" src=\"https:\/\/virtualofficeinestonia.com\/wp-content\/plugins\/ultimate-faqs\/assets\/img\/Thumbs-up-icon.png\" alt=\"Thumbs Up Icon\">\t\t<span>4<\/span>\n\t<\/div>\n\t\n\t<div class='ewd-ufaq-rating-button ewd-ufaq-down-vote ewd-ufaq-ratings-default-image' data-faq_id='6227'>\n\t\t<img decoding=\"async\" src=\"https:\/\/virtualofficeinestonia.com\/wp-content\/plugins\/ultimate-faqs\/assets\/img\/Thumbs-down-icon.png\" alt=\"Thumbs Down Icon\">\t\t<span>0<\/span>\n\t<\/div>\n<\/div>\n\n<div class='ewd-ufaq-clear'><\/div>\n\t\t\n\t\t\t<div class='ewd-ufaq-social-links'>\n\n\t<span class='ewd-ufaq-social-links-label'>\n\t\tShare\t<\/span>\n\t\n\t<ul class='rrssb-buttons'>\n\t\t<li class='rrssb-email'>\n\n\t<a href='mailto:?subject=Check+out+this+helpful+FAQ&amp;body=What+to+do+with+negative+share+capital+%28net+assets%29%3F+%7C+https%3A%2F%2Fvirtualofficeinestonia.com%2Fet%2Fufaqs%2Fwhat-to-do-with-negative-share-capital%2Fsingle-faq%2Fwhat-to-do-with-negative-share-capital%2F'>\n\n\t\t<span class='rrssb-icon'>\n\n\t\t\t<svg xmlns='http:\/\/www.w3.org\/2000\/svg' width='28' height='28' viewbox='0 0 28 28'>\n\t\t\t\t<path d='M20.11 26.147c-2.335 1.05-4.36 1.4-7.124 1.4C6.524 27.548.84 22.916.84 15.284.84 7.343 6.602.45 15.4.45c6.854 0 11.8 4.7 11.8 11.252 0 5.684-3.193 9.265-7.398 9.3-1.83 0-3.153-.934-3.347-2.997h-.077c-1.208 1.986-2.96 2.997-5.023 2.997-2.532 0-4.36-1.868-4.36-5.062 0-4.75 3.503-9.07 9.11-9.07 1.713 0 3.7.4 4.6.972l-1.17 7.203c-.387 2.298-.115 3.3 1 3.4 1.674 0 3.774-2.102 3.774-6.58 0-5.06-3.27-8.994-9.304-8.994C9.05 2.87 3.83 7.545 3.83 14.97c0 6.5 4.2 10.2 10 10.202 1.987 0 4.09-.43 5.647-1.245l.634 2.22zM16.647 10.1c-.31-.078-.7-.155-1.207-.155-2.572 0-4.596 2.53-4.596 5.53 0 1.5.7 2.4 1.9 2.4 1.44 0 2.96-1.83 3.31-4.088l.592-3.72z' \/>\n\t\t\t<\/svg>\n\n\t\t<\/span>\n\n\t\t<span class='rrssb-text'>email<\/span>\n\n\t<\/a>\n\n<\/li>\t<\/ul>\n\n<\/div>\n\t\t\n\t\t\t<div class='ewd-ufaq-permalink'>\n\t\n\t<a href='https:\/\/virtualofficeinestonia.com\/et\/ufaqs\/what-to-do-with-negative-share-capital\/single-faq\/what-to-do-with-negative-share-capital\/'>\n\t\t\n\t\t\t\t <div class='ewd-ufaq-permalink-image'><\/div> \t\n\t<\/a>\n\n<\/div>\n\t\t\n\t\t\t\n\t\t\n\t\t\t<div class='ewd-ufaq-back-to-top'>\n\t\n\t<a class='ewd-ufaq-back-to-top-link'>\n\t\tBack to Top\t<\/a>\n\n<\/div>\n\t\t\n\t<\/div>\n\n<\/div>\n\t<\/div>\n\n\t\n<\/div>","protected":false},"excerpt":{"rendered":"<p>A What to do with negative share capital (net assets)? Negative share capital must be resolved as soon as possible. Below is a practical roadmap that aligns with the requirements of the\u00a0Commercial Code\u00a0(\u00c4riseadustik) and common market solutions. 1. When is equity \u201ctoo low\u201d? Under Commercial Code \u00a7 176(2), the company\u2019s net assets must be at [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","template":"","ufaq-category":[318,400],"ufaq-tag":[351,423,332,370],"class_list":["post-6227","ufaq","type-ufaq","status-publish","hentry","ufaq-category-accounting","ufaq-category-company-liquitation","ufaq-tag-accounting","ufaq-tag-commercial-code","ufaq-tag-estonia","ufaq-tag-share-capital"],"jetpack_likes_enabled":false,"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/virtualofficeinestonia.com\/et\/wp-json\/wp\/v2\/ufaq\/6227","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/virtualofficeinestonia.com\/et\/wp-json\/wp\/v2\/ufaq"}],"about":[{"href":"https:\/\/virtualofficeinestonia.com\/et\/wp-json\/wp\/v2\/types\/ufaq"}],"author":[{"embeddable":true,"href":"https:\/\/virtualofficeinestonia.com\/et\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/virtualofficeinestonia.com\/et\/wp-json\/wp\/v2\/comments?post=6227"}],"wp:attachment":[{"href":"https:\/\/virtualofficeinestonia.com\/et\/wp-json\/wp\/v2\/media?parent=6227"}],"wp:term":[{"taxonomy":"ufaq-category","embeddable":true,"href":"https:\/\/virtualofficeinestonia.com\/et\/wp-json\/wp\/v2\/ufaq-category?post=6227"},{"taxonomy":"ufaq-tag","embeddable":true,"href":"https:\/\/virtualofficeinestonia.com\/et\/wp-json\/wp\/v2\/ufaq-tag?post=6227"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}