A profit allocation decision (osanike otsus / shareholders’ resolution) is a frequent “companion” document to the OÜ annual report. Even if the profit is small, you typically need to document what happens next: keep the profit in the company, cover prior losses, or declare dividends. A common (and expensive) mistake is declaring dividends without checking net assets/equity and without a properly drafted resolution.
Don’t mix up a board proposal and a shareholders’ decision. The annual report can describe a proposal, but the legally binding decision should be a separate document — otherwise you may need to “translate” your wording to the bank or auditor later.
Below is a practical structure: what to include, what to check before dividends, and how to keep everything consistent with the annual report.
In practice, before filing, verify the requirements in EMTA guidance on dividend taxation and Income Tax Act (TuMS).
What the decision should include (minimum)
- Approval of the annual report for the majandusaasta period.
- Decision on profit/loss:
- retain (keep undistributed);
- allocate to cover losses; or
- declare dividends.
- If dividends: the amount, the payment date/period, and who executes it (the management board).
For a single-shareholder OÜ, this is usually a one-page document: the sole shareholder’s decision.
Mini template (single shareholder)
“Approve the OÜ annual report for the period …. Allocate profit of … EUR as follows: …. Pay dividends of … EUR by …. Authorize the management board to execute the payment.”
If there are multiple shareholders, add:
- the list of shareholders and shareholdings,
- voting results,
- quorum / procedure notes.
Checks before dividends (to avoid a legal problem)
- Net assets / equity: make sure equity is not too low or negative.
- Liquidity: profit on paper does not automatically mean cash in the bank.
- Tax logic: dividends are a different story than salary/board remuneration.
- Documentation: the resolution is dated, signed, and stored together with the annual report documents.
How this connects to e‑Äriregister
When filing the annual report in e‑Äriregister, you enter the key information, but the shareholders’ decision is your internal “anchor”: it proves that the report is approved and the profit allocation is legal. This is exactly what banks and auditors often ask for.
Typical mistakes
- a resolution with no date or signatures;
- no explicit approval of the annual report;
- declaring dividends without a net assets (netovara) check;
- mixing dividends with board remuneration (a compliance red flag).
Quick checklist
- The annual report is approved (or you have a clear approval plan).
- The resolution is signed and stored in the year folder.
- Net assets / equity is checked.
- You have cash for payment and a realistic timeline.
- Your accountant has the payment date/amount for correct posting and tax treatment.
See also on blog.accres.eu
How we can help
If you want to close this topic quickly and avoid refiling: we can review the numbers, prepare the annual report in e‑Äriregister, and provide a clean resolution template for your case. Contact us.
Accountant-style scenarios and wording
Retaining profit in the company (most common)
Why: strengthen equity, finance growth, and avoid tax/liquidity risks. Example wording:
“Retain the profit as undistributed. Use it in subsequent periods to finance the company’s operations.”
Covering prior-year losses
If you have accumulated losses, it’s usually logical to cover them first and only then consider dividends. Example wording:
“Allocate profit to cover prior-year losses in the amount of … EUR.”
Dividends in instalments
If you want to pay dividends in parts:
- state the total dividend amount,
- note that payment may be made in instalments until date X,
- authorize the management board to set the payment schedule within the approved total.
Important: accounting still needs the actual payment dates for correct posting and tax treatment.
What if you need the decision urgently but not everything is ready
If the report is ready but shareholders haven’t signed the resolution yet:
- don’t delay coordination,
- prepare the draft resolution in advance and approve the wording by email,
- collect final signatures on the approval date.
If deadlines are tight, sometimes you file the annual report on time and then update status/documents later (the exact workflow depends on the e‑Äriregister process). It’s still better than being late.
FAQ
Can we approve the annual report and not take a profit allocation decision?
In practice, it’s better to take one. It removes questions about equity and clarifies what the company is doing with the result.
If the company has one shareholder who is also the director, is it still needed?
Yes. Formally it’s a sole shareholder decision — and it’s a document banks and auditors like to see.
Do we need to attach the decision to the annual report?
Usually the decision is kept in the company’s records, while the annual report itself is filed to the register. But store the decision together with that year’s documentation.
Net assets check: the key “safety fuse”
Before dividends, ask one question: “After paying dividends, will equity / net assets still be OK?”.
If equity is already weak or negative, dividends:
- worsen the financial position,
- create compliance questions,
- can complicate banking and financing.
That’s why the usual safe sequence is:
- finalise bookkeeping quality and notes (lisad);
- assess equity / net assets;
- approve the profit allocation decision.
What documents to keep together
- annual report (final version / PDF preview);
- shareholders’ decision;
- calculation of the distributable amount (if paid in instalments);
- payment confirmations (bank statements).
This reduces dispute risk and usually makes bank checks much easier.
If you want, we can provide a clean resolution template for your case (one shareholder / several shareholders / instalments) and verify that it is consistent with the annual report numbers and equity. It’s a small effort that can save you a lot of time later — especially if the company had shareholder loans or non‑standard year-end transactions.
Frequently asked questions
Do these requirements apply to every OÜ?
For most OÜ companies yes, but exact scope depends on turnover, transactions, and reporting complexity.
What is the biggest practical risk?
Usually incomplete documentation and late confirmations, because both lead to rework and deadline pressure.
When should we involve an accountant?
Ideally before key filing dates and whenever your transaction model changes significantly.