Shareholder Exit in Estonian Private Limited Companies: Proposals of the Company Law Revision Working Group

Private limited companies are small, closed companies in which, as a rule, there are few shareholders. Regrettably, conflicts arise between shareholders that cannot be resolved in such a way that the persons in dispute remain shareholders, since protracted litigation reduces the value of the company and may lead to the closing of the business. For resolving such situations, several countries have made provisions in their laws for the possibility of shareholder exit. Current Estonian law does not provide for shareholder exit. The law regulates only a shareholder’s expulsion, but this remedy is not widely used in practice, since its scope is so limited. This mechanism cannot be used for solving the problems in most cases. There are some other possibilities for shareholder exit, but they are merely theoretical and have not been proved in case law. A review of Estonia’s company law commenced in 2016, and the working group presented its proposals for amending the relevant laws in 2019. One proposal made by the revision working group was to bring into the law provisions governing shareholder exit. Under the proposals made, shareholder exit would be possible only for a valid reason and as ultima ratio. The right to claim for exclusion of a shareholder is held by any shareholder(s) having at least 50% of the votes. If a shareholder is excluded from the company, the court has to determine the compensation to be paid to the departing shareholder, taking into account the rules on capital maintenance.

22. The doctrine of capital maintenance

This chapter discusses the doctrine of capital maintenance which precludes the return of capital, directly or indirectly, to the shareholders ahead of a winding up of the company. The discussion covers the purchase and redemption of a company’s own shares, reduction of capital, distributions to the members, and financial assistance by a company for the acquisition of its own shares. Purchase and redemption schemes (buy-backs) are common transactions and are discussed in detail as is the procedure for a reduction of capital. The key issue for creditors, however, is the risk posed by distributions to members and much of the chapter is devoted to discussing the distribution rules laid down in CA 2006, Part 23 and the common law. The chapter discusses the rules as to distributable profits and the liability of directors in the case of improper distributions and, in particular, their liability for dividends improperly declared.

Behaviors and Trends toward Routine Maintenance and Major Repairs of Afridev Handpumps in Rural Malawi

Service provision for Afridev handpumps through community management in Malawi is a notable challenge. Essential preventative maintenance is often neglected, and repairs are undertaken on a reactive basis. The costs of major repairs are not recognized at community level and are typically neglected across the lifecycle of infrastructure or left to external stakeholders. The aim of this study was to investigate preventative maintenance and capital maintenance expenditure over the 15-year design lifecycle of 21,997 Afridev handpumps in Malawi, and how costs change based on different local tariff collection scenarios. A total of four tariff collection scenarios were investigated, for assets both subject and not subject to rehabilitation. The findings highlight poor initial capacity building into appropriate cost recovery and maintenance approaches. Major repair costs increase over the pump lifecycle when service consists of the replacement of low-cost, fast-wearing parts. Rehabilitation/major repair costs increase as a result but tend to be focused on simple longer-life components, such as pump rods. In both cases, a reliance on external support was highlighted, as larger costs are primarily covered by donors and Non-Governmental Organisations (NGOs). Proactive tariff scenarios may provide a greater capability of replacement throughout the lifecycle of major items when compared to reactive tariff scenarios. It is recommended that policy and practitioners should focus on capacity building of sustainable maintenance models that consider the full lifecycle costs of assets.

AERIAL ROPEWAY SYSTEM- FEASIBILITY STUDY IN DOHA, QATAR

Aerial ropeway systems, also called gondolas and aerial cable cars, are amongst driverless transportation modes, which are progressively drawing the attention in promoting tourism. Aerial ropeway systems have been operated in touristic spots e.g., over lakes, rivers, and hilly lands in several countries. Passengers can enjoy a view from the above and experience a stress-free and reliable trip. Furthermore, those systems can be exploited as a public transportation in urbanized and populated regions. The objective of this article is to investigate the viability of implementing a gondola line flying over Doha Bay in Qatar as a tourist attraction from the marketing, economic, and environmental point of view. In this study, the associated costs (capital, maintenance, and operating) of implementing a monocable detachable gondola technology(MDG) are estimated using international best practices in the world. The economic analysis outcome demonstrates that the revenues generated from the fares could counterweigh the required capital investment as well as operating and maintenance costs and hence the proposed gondola could be economically attractive for investors. Moreover, no significant negative impacts and footprint on the environment are anticipated at the exploitation phase of the gondola.

Theoretical approaches to accounting for non-current assets: economic and financial interpretation of depreciation

В публикации предпринята попытка теоретического обоснования положений по оценке внеоборотных активов с точки зрения их кругооборота и использования амортизации как источника самофинансирования. За счет анализа амортизационной политики и выделения амортизации в составе расходов текущего периода предлагается оценить процесс возмещения стоимости внеоборотных активов в операционной деятельности и способность организации к обновлению внеоборотного капитала за счет амортизационных отчислений. Проведенные аналитические процедуры предопределили правила переоценки внеоборотных активов, ее отражения в балансе и трактовку переоценки с точки зрения физической и финансовой концепции поддержания капитала. По мнению автора, предложенный подход к обоснованию методов учета позволяет не только показать актуальную оценку внеоборотных активов на дату составления отчетности, но создает качественно новую отчетную информацию, характеризующую эффект от участия внеоборотных активов в операционной деятельности в прошлом, настоящем и будущем. The publication attempts to theoretically substantiate the provisions for the assessment of non-current assets from the point of view of their circulation and the use of depreciation as a source of self-financing. By analyzing the depreciation policy and allocating depreciation as part of the current period, it is proposed to assess the process of reimbursing the cost of non-current assets in operating activities and the organization's ability to renew non-current capital at the expense of depreciation charges. The conducted analytical procedures predetermined the rules for the revaluation of non-current assets, its reflection in the balance sheet and the interpretation of the revaluation from the point of view of the physical and financial concept of capital maintenance. According to the author, the proposed approach to substantiating accounting methods allows not only to show the actual assessment of non-current assets as of the reporting date, but creates a qualitatively new reporting information characterizing the effect of the participation of non-current assets in operating activities in the past, present and future.