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Dear clients and cooperation partners,
Following on previous amendments to the Latvian Commercial Law covered in the SORAINEN Corporate Newsflash of 30 June, further amendments to the Commercial Law already came into force on 13 July 2011.
These amendments require shareholders of companies (SIA and AS) and members of partnerships to inform their company about the company’s true beneficiaries in the shape of natural persons. This obligation refers to:
- shareholders who are legal entities holding more than 25% of shares in the company and established outside the European Union; or
- shareholders of companies holding more than 25% shares in the company in their own name but for the benefit of another person irrespective of the state of establishment of the shareholder.
To fulfil this obligation, also shareholders of companies already registered with the Commercial Register and complying with one of the above-mentioned criteria must notify the company by 31 December 2011 under the procedure laid down in the Group of Companies Law about true beneficiaries or supply explanations why this information is not provided. If company shareholders cannot identify the true beneficiary for objective reasons or no such person exists under the Law on Prevention of Laundering of the Proceeds of Crime and Terrorist Financing (for example, no natural person directly or indirectly owns at least 25% shares in the company), the shareholders must state in the notification why data about the true beneficiaries are not provided.
The company management board must require this notification from shareholders and file it with the Commercial Register within 14 days after receiving it.
The amendments do not lay down a special mechanism for checking performance of this obligation. Therefore performance will most likely be checked under the Administrative Violations Code, which lays down responsibility of company management board members for non-supply of data to the Enterprise Register within the term specified by law: in this case 14 days as of receiving the shareholders’ notice about true beneficiaries (that is no later than 14 January 2012). Additionally it should be noted that shareholders who knowingly supply incorrect information may be subject to criminal liability.
Information about true beneficiaries will not be publicly available. That is, only law enforcement and control institutions will be entitled to it.
We are asking all clients to consider this information and contact SORAINEN or your legal adviser if you need additional information or assistance in preparing shareholders' notices to companies or management board notices to the Commercial Register. |
