Why doesn't LeapIN allow multiple shareholders?

Last updated: April 09, 2018

While an Estonian private limited liability company is allowed to have multiple shareholders, this structure is much more complex to handle, compared to a single-member entity. For instance:

  • Who makes the decisions and how? If you're alone in your company, you are fully in charge, don't need anybody's permission to make the decisions, and don't have to write down the official principles either. Less hassle. In contrast, if you have at least 1 partner, the official decision making rules start to matter, and have to be agreed, written down, and kept up-to-date to avoid conflicts later on.

  • What is the content of the Articles of Association (AoA)? It's an official document which stipulates the core facts about the company (name, share capital etc) including the decision-making rights. Derived from the previous point, if you're alone, you are ok with the standard version of the AoA. Yet, if you have a partner, it's likely that the standard AoA wouldn't meet your internal agreements and would have to be customised.

  • What transactions need to be made if a shareholder leaves/joins? If you are the single shareholder of your company and keep it this way, there's nobody to join/leave your company, and the knowledge required and capability to execute transactions with the shares of the company are irrelevant. Again, less to worry about. In contrast, if you start with multiple shareholders, sooner or later one of the shareholders will decide to leave, or you'll need to change % of the shares among the existing shareholders. So, you'll need to execute transactions with your shares.

LeapIN provides a standardised service which delivers exceptional value to a certain type of customer, automating the processes behind the scenes as much as possible, and sharing the gains with our customers (a gain in efficiency means a lower price for the customer).

While we optimised the company registration and administration flows for a single-member company, multiple-shareholder companies require a customised solution, partly due to the existing limitations of the Estonian ecosystem. Since tailored solutions are in conflict with our desire to standardise and automate processes, we focus on single-member companies only and don't accept companies with multiple shareholders.

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