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Dear clients and cooperation partners,
In previous newsflashes:
COMMERCIAL LAW AMENDMENTS TO PREVENT RAIDERISM
and
GUIDELINES FOR COMPANIES ON EURO INTRODUCTION
we informed you about the obligation to ensure that company corporate documents comply with the law. In relation to organising documents, the most significant deadlines are:
- 30 June 2015, private limited liability companies (in Latvian: sabiedrība ar ierobežotu atbildību or SIA) must file the first section of the shareholder register with the Company Register by this date;
- 30 June 2016, by this date companies must file documents with the Company Register substantiating denomination of their share capital and nominal value of shares from lats to euro.
These deadlines are partially revoked but the filing obligation remains!
On 4 June 2015, amendments to the Commercial Law came into force with the aim of decreasing companies’ administrative burden in relation to organising corporate documents by removing deadlines in certain cases for filing documents with the Company Register.
First section of SIA shareholder register
A SIA board must prepare the first section of the shareholder register in line with the Commercial Law and file it with the Company Register by 30 June 2015; however, for SIAs with one shareholder the amendments of 4 June 2015 to the Commercial Law allow certain derogations:
| 1 shareholder |
2 shareholders and more |
No deadline for filing the first section of the shareholder register with the Company Register.
The first section of the shareholder register must be filed with the Company Register on changing either the composition of SIA shareholders or share capital. |
The first section of the shareholder register must be filed with the Company Register by 30 June 2015. |
We recommend that SIAs with two or more shareholders immediately check whether the first section of the shareholders’ register has been signed by the chair of the board or a board member authorised by the board in the presence of a notary or official of the Company Register, or by a safe electronic signature, and is filed with the Company Register.
Denomination of share capital and shares in euro
In relation to introduction of the euro, companies must denominate their share capital and the nominal value of shares from lats to euros. To meet this requirement, the company board must convene a shareholders’ meeting in line with the procedure stated by law and the articles of association; the agenda for the meeting should include issues on denomination of the share capital from lats to euros and also on amendments to the articles of association.
Denomination of the share capital and nominal value of shares from lats to euros should be notified to the commercial register for registration by 30 June 2016. Under the new amendments to the Commercial Law, if the share capital is not expressed in euros by the deadline, the Company Register will automatically convert the share capital from lats to euros in line with the exchange rate of EUR 1 = LVL 0.702804.
If the Company Register converts the share capital from lats to euros, the company board must still organise denomination of the share capital and nominal value of shares from lats to euros and file documents substantiating denomination with the Company Register when any other changes are notified to the commercial register for registration.
We nevertheless recommend planning denomination of share capital from lats to euros in good time because, first, facilitations are applied before the deadline with regard to preparation of documents and payment of state duty, and, second, it is best to avoid a situation where, because denomination requires signature of several corporate documents, registration of other corporate changes in the commercial register is delayed. |
