Supervisory board of an Estonian company
Supervisory board is appointed in order to supervise management board on behalf of the shareholders.
Only Public Limited Companies and Foundations must have a Supervisory board. For Private limited companies, a Supervisory board is an option that is rarely used.
Management Board of an Estonian company
also called as directors or board
Directing body
A private limited company must have a management board. The management board is the directing body of the private limited company that represents and directs the business of the company. The management board may have one member (director) or several members. A member of the management board need not be a shareholder. A member of the management board must be a natural person with active legal capacity.
Place of residence
If the members of the management board of the Estonian company are residing outside of Estonia, then there is an obligation to appoint a contact person to receive procedural documents. As a licensed service provider, CorpAgent can act as a contact person in your company.
Salary
It is not obligatory to pay salary to members of the management board, but if it is decided to pay, the amount of remuneration payable shall be determined by a resolution of the shareholders.
Procuration in Estonian company
Rights to represent the company
As a rule, a company is represented by the members of the management board but in some cases (board members are away from the location of the company, etc.) it is advisable to give the right to represent the company to somebody who is not a board member.
This right to represent the company is called “procuration”. It is a special authorisation which gives a person the right to represent the company in all transactions related to economic activities, however the procurator may transfer or encumber an immovable of the company only if the company grants this right to him in the procuration, and this is noted in the commercial register.
Procuration may only be granted to a natural person and the company may have one or several procurators. Procuration may be granted to several persons in such a manner that all or some of the procurators are only entitled to represent the company jointly (joint procuration) or in such a manner that the procurator may represent the company only jointly with a member of the management board.
A procurator shall sign such that he adds the word “prokurist” [procurator] or the abbreviation “p.p.” (per procura) to his signature.
A procurator is prohibited to transfer the procuration and the company may terminate a procuration at any time.