Sole Proprietorship (Üksikettevõtja):
- Characteristics: Owned and operated by a single individual.
- Benefits: Simple and inexpensive to establish and operate.
- Limitations: Unlimited personal liability for business debts and obligations.
- Legal Obligations: Personal income tax obligations for the owner.
- Tax Implications: Profits taxed as personal income.
- Legal References: Commercial Code §§ 64-70.
Private Limited Company (Osaühing, OÜ):
- Characteristics: Separate legal entity with limited liability for shareholders.
- Benefits: Limited liability, separate legal personality, and flexibility in management.
- Limitations: More complex and costly to establish and maintain than sole proprietorships.
- Legal Obligations: Compliance with company law and financial reporting requirements.
- Tax Implications: Corporate income tax on profits distributed as dividends.
- Legal References: Commercial Code §§ 149-227.
Public Limited Company (Aktsiaselts, AS):
- Characteristics: Company with transferable shares and limited liability for shareholders.
- Benefits: Access to capital markets, limited liability for shareholders.
- Limitations: More stringent regulatory requirements and reporting obligations.
- Legal Obligations: Compliance with company law, financial reporting, and corporate governance standards.
- Tax Implications: Corporate income tax on profits distributed as dividends.
- Legal References: Commercial Code §§ 228-295.
Freelancer (Vabakutseline, Income Tax Act (ITA).):
- Criteria: Self-employed individuals providing services on a contractual basis.
- Rights: Flexibility in work arrangements and client selection.
- Responsibilities: Self-employment tax obligations, invoicing clients, managing business expenses.
- Tax Considerations: Personal income tax on earnings.
Registration Process and Costs:
Sole Proprietorship (Commercial Code §§ 64-70.):
- Registration: Submit application to the Commercial Register.
- Cost: Registration fee of 145 EUR (as of 2024).
- Timeline: Typically processed within 1-5 business days.
Private Limited Company: (Commercial Code §§ 149-227.)
- Registration: Prepare Articles of Association, notarize documents, and submit to the Commercial Register.
- Cost: Notary and state fees totaling approximately 250 EUR (as of 2024).
- Timeline: Incorporation typically completed within 3-5 business days.
Public Limited Company: (Commercial Code §§ 228-295.)
- Registration: Prepare Articles of Association, notarize documents, and submit to the Commercial Register.
- Cost: Notary and state fees totaling approximately 500 EUR (as of 2024).
- Timeline: Incorporation typically completed within 3-5 business days.
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