EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 9 June 2006  
at the request of the Estonian Ministry of Justice  
on a draft law amending the Commercial Code and some other legislation to facilitate euro 
introduction  
(CON/2006/28) 
 
Introduction and legal basis  
On 11 April 2006 the European Central Bank (ECB) r eceived a request from the Estonian Ministry of 
Justice for an opinion on a draft law amending the Commercial Code, the Law on the land register, the 
Law on commercial pledges, the Law on commercial associations and the Law on State fees (hereinafter ‘the draft law’). 
The ECB’s competence to deliver an  opinion is based on Article 105(4) of the Treaty establishing the 
European Community and the first and sixth indents of Article 2(1) of Council Decision 98/415/EC of 
29 June 1998 on the consultation of the European Ce ntral Bank by national authorities regarding draft 
legislative provisions
1, as the draft law relates to currency matte rs and the stability of financial markets. 
In accordance with the first sentence of Article 17.5 of  the Rules of Procedure of the European Central 
Bank, the Governing Council has adopted this opinion. 
 1.  Purpose of the draft law 
The draft law provides for (i) the redenomination in to euro of shares and share capital for companies 
registered in Estonia; and (ii) the option for comp anies to issue non-par value shares. In addition, it 
amends Estonian law to allow amounts in the land register and commercial pledge register to be 
expressed in euro. One purpose of the draft law is to reduce the costs and eliminate the state fees payable 
on share capital increases or decreases resulting from reca lculations relating to the future introduction of 
the euro in Estonia.  
 2. General observations  2.1 The draft law introduces provisions regarding the methods and procedure for redenomination of the 
nominal values of shares and share capital into euro. The redenomination is based on the following 
principles: 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2 -  minimum share values are to be rounded up to  EUR 1 for unlimited partnerships and public 
limited companies; exceptionally, public limi ted companies established before 1 July 2006 
may have share values of 50 euro cent or its multiple;  
-  minimum share values are to be rounded down to EUR 5 for private limited companies 
established until 1 July 2006 and the minimum share value is EUR 10 for companies established after 1 July 2006; 
-  the minimum share capital of private li mited companies is to be rounded down to 
EUR 2 500; 
-  the minimum share capital of public limited companies is to be rounded down to 
EUR 25 000, the minimum amount of share capital required by the Second Company Law Directive
2.  
2.2 The draft law also introduces in Estonian law th e additional option for companies to have shares 
without a nominal amount. This would eliminate th e need to increase or decrease share capital on 
conversion to the euro, thus in troducing flexibility and simplicity3. This solution was recommended 
by the European Commission4. The draft law is also in line with the Second Company Law 
Directive, which recognises and permits the use of e ither ‘nominal value of shares’ or ‘accountable 
par’. According to the draft law, the minimum am ount of an accountable par share is EUR 1 (or 50 
euro cent for companies established before 1 July 2006) in order to avoid the emergence of penny-
stocks. 
 3. Specific remarks 3.1  The ECB generally welcomes early preparation for the introduction of the euro. However, the 
current draft law (i) is scheduled to enter into fo rce before the introduction of the euro in Estonia, 
namely on 1 July 2006; and (ii) applies the cu rrent exchange rate between the euro and the 
Estonian kroon on the apparent assumption that it w ill be the same as the eventual conversion rate. 
3.2 With regard to the timing of the entry into for ce of the draft law, the ECB would like to stress that 
any form of official redenomination (as currently  provided for by the draft law) should not take 
place before the date of the introduction of th e euro, following the Council’s decision on the 
abrogation of Estonia’s derogation under Article 122(2) of the Treaty. The practice of other 
Member States has been that the official redenom ination from the national currency into the euro 
                                                 
2  Second Council Directive 77/91/EEC of 13 December 1976 on coordination of safeguards which, for the protection of the 
interests of members and others, are required by Member States of companies within the meaning of the second 
paragraph of Article 58 of the Treaty, in respect of th e formation of public limited liability companies and the 
maintenance and alteration of their capita l, with a view to making such safeguar ds equivalent (OJ L 26, 31.1.1977 p. 1). 
3  See ECB Opinion CON/98/48 of 20 October 1998 at the re quest of the Luxembourg Minister for Relations with 
Parliament, the Grand Duchy of Luxembourg, under Articles  109l (2) and 109f (6) of the Treaty establishing the 
European Community and Article 5.3 of the Statute of the Euro pean Monetary Institute on a draft legislative proposal to 
facilitate the redenomination of the capital of corporations  in euro and settle rounding problems in this connection. 
4  See ‘The Impact of the introducti on of the euro on capital markets’, Co mmission Communication (E uro Paper No 03, 
July 1997; available on the European Commission’s website at www.europa.eu.int ), p. 3.  
3 through national legislation only takes place upon  the introduction of the euro. This practice 
provides both clarity and legal certainty and is consistent with Community legislation. 
3.3 In respect of the exchange rate for the rede nomination of the nominal values of shares and share 
capital into euro, the ECB would like to recall that Article 123(5) of the Treaty provides that if the 
Council decides to abrogate the derogation, it ‘sha ll … adopt the rate at which the euro shall be 
substituted for the currency of the Member State concerned’. Furthermore, Community secondary 
legislation on monetary matters, including the conversion rates adopted in accordance with 
Article 123(5) of the Treaty, is directly applicab le in the Member States. Official redenomination 
should therefore only take place on the basis of  the adopted conversion rate and it cannot be 
assumed that the current exchange rate between th e euro and the Estonian kroon will be the same 
as the eventual conversion rate. 
3.4  In view of the above comments, the ECB is of th e opinion that the date of entry into force of the 
draft law (currently 1 July 2006)  should relate to the date when Estonia’s derogation is abrogated 
and the Council has adopted the rate at which the euro will be substituted for the Estonian kroon. 
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 9 June 2006. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET