Negative share capital must be resolved as soon as possible.

Below is a practical roadmap that aligns with the requirements of the Commercial Code (Äriseadustik) and common market solutions.

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1. When is equity “too low”?

Under Commercial Code § 176(2), the company’s net assets must be at least:

• 50 % of registered share capital, and
• not less than the minimum share‑capital requirement (currently € 2 500 for OÜs).

Example:
An OÜ with a registered capital of €2 500 must keep equity ≥ €2 500 (100 %).

If the balance sheet shows that equity is below either limit (often expressed as negative share capital), the board must convene a shareholders’ meeting within three months after approval of the annual report to decide on remedies.

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2. Practical ways to restore equity

1. Issue new shares/owner cash injection – quickest textbook fix.
2. Convert shareholder loans into equity (set‑off contribution).
3. Revalue (upwards) real estate or IP – allowed if a fair‑value report substantiates it.
4. Cut costs & improve margins – demonstrate turnaround in the next financial year.
5. Sell non‑core assets – realise gains, book profit.
6. Reduce share capital to a minimum (€2 500) and cover the rest via profit or later capital increase.

Tip: Make sure any capital manoeuvre is properly documented, entered in the accounting ledgers and registered in e-Business Register.

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3. Exit scenarios

• Sell the company – shares can be transferred to a buyer who is willing to recapitalise. Ensure the SPA allocates responsibility for past debts.
• Liquidate – 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.
• Turnkey liquidation service – we can handle filings, creditor notices, accounting & tax clearance (fees start around €300–€1 000).

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4. When will the share capital be returned?

Only the paid-in share capital may be returned to the owner, and this may occur no earlier than 4 months after the liquidation process begins. The return can include both the registered share capital and any remaining funds in the company’s bank account, provided all legal obligations have been fulfilled.

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NB!

In Estonia, for a Private Limited Company (OÜ), the €2,500 minimum share capital requirement was abolished in February 2023, meaning the share capital can be as low as €0.01; however, founders become personally liable for the difference if assets fall short of €2,500 in bankruptcy. For a Public Limited Company (AS), the minimum remains €25,000.