Document categories related to assets and transactions
In real estate transactions it is important to keep in mind that in case of transfer of ownership the law prescribes a mandatory notarised format and therefore all sale transactions of apartments, land plots and houses and the related preliminary agreements must be concluded at the presence of a notary. The notary fee includes also assistance in drafting the documents related to such transactions.
In case the mandatory format is not followed the agreement is void although, for example, the accessory obligations included in preliminary agreement concluded in simple written format – regarding contractual penalties or exclusivity – may remain valid depending on their contents.
Several transactions related to real estate, however, do not need notarised format and for executing such transactions you can find documents in Avokaado’s selection.
Lease and rent relations
With lease agreement the lessor undertakes to grant the use of an object (residential premises, commercial premises) to the lessee and the lessee undertakes to pay rent for that. By commercial lease contract the lessor undertakes to grant to the use of the Lessee the object of the contract and enables the fruits received from the object of the commercial lease contract to be enjoyed by the lessee under the rules of regular management and the lessee is obliged to pay rent for that. Therefore the material difference between the lease and the commercial lease is whether the lessee is entitled to receive the fruits from the leased object. Despite the fact that the lease agreement does not have mandatory format, it is always advisable to establish the agreements between parties in writing.
Insolvency means a situation where a person cannot satisfy the claims of creditors and such failure is not temporary considering the economic situation of the debtor. Main types of proceedings related to insolvency are bankruptcy, reorganisation, conciliation and debt restructuring proceedings.
Claims may arise from agreements, unlawful damage, unjustified enrichment, negotiorum gestio, a public promise to pay or from other grounds provided by law. Claim falls due at the moment when the creditor becomes entitled to claim performance of obligation from the debtor.
Claims may be submitted extra-judicially, in expedited procedure in the matter of payment order, in action proceedings or bankruptcy proceedings and in filing a claim it is important to keep in mind the limitation period, after which the debtor is entitled to refuse from performing his/her obligation. The ordinary limitation period for claims deriving from transaction is 3 years. The limitation period for a claim recognised by a court judgment which has become final or a claim which arises from a settlement approved by a court or from another execution document (including notarised agreement for submission to compulsory execution) is 10 years.
Intellectual property is a person’s right to the result of his/her mental work- knowhow and creation. Intellectual property includes copyright, industrial design, trademark, geographical indication, business secret, domain names etc. The owners are entitled to receive profit through their intellectual property. For example, the owner may sell all his/her intellectual property, may license it for specific conditions or may conclude a know-how contract. When someone violates the usage rights of the intellectual property, the owner is entitled to file a respective claim to court of law.
Leasing is an alternative to loan. The security for the leasing is the object financed by the leasing. In addition to banks, leasing may be provided by all companies. Various leasing types include financial lease and operational lease. In case of financial lease the parties agree that at the expiry of the leasing term the ownership of the object of the leasing is transferred to the leaseholder or the leaseholder will be obliged to acquire the object of the leasing for the agreed residual value. During the leasing term the leaseholder pays instalments, which cover the financial lease costs of the lessor and the credit interests. In case of operational lease the leaseholder will not have the obligation to acquire the object of the leasing, the leaseholder is only entitled to use the object of the leasing during the leasing term.
Purchase and sale of shares of LLC (OÜ)
The law prescribes mandatory notarised format for the sale transaction of shares of private limited liability company (OÜ). Therefore generally a notary must be approached in order to execute the sale of OÜ share. An exception is the transfer of OÜ shares that are registered in Estonian Central Register of Securities (ECRS), which can be transferred through ECRS. In such case the notarised format of the transfer agreement is not prescribed. As in case of purchasing securities registered in ECRS (incl. shares of LLC (OÜ) and PLC (AS)) the acquirer of the securities enjoys as strong legal protection as in case of purchasing immovable based on land register entry, we advise to register the shares of OÜ in ECRS prior to selling them. In addition to strong legal protection the sale of shares registered in ECRS is less costly, because the parties do not have to pay the notary fees.