Latvian Corporate Newsflash - July 2011
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  Eva Berlaus
Eva Berlaus
  Roberts Prūsis
Roberts Prūsis
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:

  1. shareholders who are legal entities holding more than 25% of shares in the company and established outside the European Union; or
  2. 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.

Karin Madisson
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Pärnu mnt 15
10141 Tallinn
phone +372 6 400 900
fax +372 6 400 901
Eva Berlaus
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Kr. Valdemāra iela 21
LV-1010 Riga
phone +371 67 365 000
fax +371 67 365 001
Algirdas Pekšys
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Jogailos g 4
LT-01116 Vilnius
phone +370 52 685 040
fax +370 52 685 041
Maksim Salahub
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ul Nemiga 40
220004 Minsk
phone +375 17 306 2102
fax +375 17 306 2079

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