To liquidate a private or public limited company by a simplified procedure, transfer the assets to the sole shareholder. The sole shareholder then becomes the legal successor.

The amendment to the Estonian Commercial Code establishes a merger procedure. This procedure transfers a company’s assets and liabilities to a sole shareholder. However, it remains unclear what the final profits for the shareholder will be. To address this, the Income Tax Act (TuMS) was supplemented. The act provides clarity on calculating and taxing profits distributed in a merger at both the company and shareholder levels.

Taxation at the company level