Non-profit association (MTÜ)
Founders and members may be physical as well as legal persons. The minimum number of founders/members is two.
In order to found a non-profit association, it is necessary to:
- conclude a memorandum of association which approves the articles of association and establishes the members of the management board (both documents must be presented in the Estonian language or as parallel texts)
- submit an application for the registration of the organisation in the business register
What must be included in the articles of association?
There is no direct necessity to add all details in the articles of association, as many aspects are already regulated by law. The articles of association must contain the following (around ten) agreements regarding the management of the organisation:
- name – the name (name query) must differ from the names of other non-profit associations and foundations, but it does not have to be in the Estonian language. The name must not be misleading with regard to the organisation’s activities. The name must contain a reference to the fact that it is an association of persons, e.g. union, society, body, board, club, federation, union, central union, circle, friends, foundation, etc. You can also simply opt for the term ‘non-profit association’ or its abbreviation (‘MTÜ’ in Estonian).
- location – street address, city, municipality; the registered office is entered into the register separately
- objective – describes the changes that the organisation aims to achieve with its activity; does not describe the activities but instead the outcomes. The objective may be quite general
- members– the conditions and procedure for membership in the non-profit association and for leaving and exclusion from the non-profit association; also the rights and obligations of members (or the way these are established – e.g. by the general meeting)
- if departments exist, their rights and obligations
- general meeting and adoption of resolutions– the procedure for calling the general meeting and the term of advance notice; proportion of members of the non-profit association that forms the quorum of a general meeting
- number of the members of the management board or their maximum and minimum number
- the distribution of assets upon dissolution – in order to apply for income tax incentive, it is necessary to write that upon dissolution, the assets will be transferred to another association or legal person under public law that is benefitting from income tax incentives
What must be included in the memorandum of association?
- address to contact the management board. When the entire management board is located in a foreign country, a contact person that corresponds to Estonian requirements must be established. Some service providers can offer this service to CSOs
- purpose (the same as in the articles of association)
- the names and residences or registered offices, and the personal identification codes or register codes of the founders;
- the obligations of the founders – such as covering the costs related to the foundation of the association (state fees)
- the names, personal identification codes and residences of the members of the management board (if a person acquires a personal identification code later, for example through e-residency, then this can be added in the register)
Foundation documents are submitted through a notary when one or several members of the management board are unable to provide a digital signature. In this case:
- the articles of association and the memorandum of association are signed on paper, after which all members of the management board take the articles of association to a notary’s office to sign the petition;
- the notary submits a petition to the register, collecting a service fee of 40–50 EUR for all proceedings; the sum depends on the number of signatures, i.e. the number of the members of the management board. The state fee (20 EUR) can be paid at the notary’s office.
- contact details (telephone number, e-mail, home page) must be submitted to the register with the petition