Associations are usually set up by two or more individuals, corporate bodies, or partners having the same goal and seeking to achieve it. The purpose of an association is always stated in the articles of association drafted by the board members.
Registering an association
Registration requires at least two people as members of the board and takes less than seven days to process. An association does not operate commercially like other entities, but it engages in certain activities as a means to generate revenue. Sometimes the entity might decide to reorganize itself, due to some factors limiting its operations. Reorganization can happen in three ways; acquisition (transfer of property to another association), merger (complete transfer of the assets of an association to a new one), and division.
A merger is said to have occurred when at least two associations transfer all their property to a newly founded association known as the acquirer. When a merger occurs, the transferee does not have to liquidate the company, its members become members of the new entity and all rights and obligations become part of the acquiring associations. Every entity in the merger must submit documents to the Enterprise Register three months before publishing the notice of merger in the official publication ‘Latvijas Vēstnesis’.
Should you own an entity and are considering merging with another, or you are simply interested in knowing about the reorganization of an entity, here is a guide on the merger of associations in the country.
Completing the registration form
The first step to a merger is deciding to transfer property. The next step is to prepare the articles of association stating the reason for the decision to merge into a new association. After this, an application form has to be filed and submitted to the Enterprise Register. The form has to be filled out and signed by the members of the board of each transferring and acquiring entity. In a case where either cannot sign, an entrusted person with a notary mandate can represent the entities. The following information has to be in the form:
- Names of the associations
- Registered addresses
- Date of the decision to merge
- Details of the members of the board, etc
Paying the state fee
A state fee shall be paid two days before the submission of the application form and required documents. After the register confirms the payment credited to the treasury account, the application is processed and the new association is formed. The register issues a certificate of registration afterward. The fee for each association involved in the merger is EUR 8, 54 to be paid to the account with the following details
Reģ. Nr. 90000050138
Valsts Kase, Konts: LV84TREL1060190913200
Not all associations pay the state fee such as an association with disabled persons, or orphans, one involved in organizing sports events for kids, etc. The state fee for the registration of a new association is EUR 11, 38, payable to the same account.
Submission of required documents
For an application for a merger to be processed, the associations involved must submit certain documents to the Enterprise register. The papers should be submitted at most three months before the publication of the notice to merge in Latvijas Vēstnesis. The following documents have to be presented during registration:
- Application form B5
- Reorganization contract or a certified copy
- Summary of the meeting of members
- Statutes of the acquiring association
- Receipt or copy of the payment of state fee
- List of members of the board in each association
- Power of attorney (if a fiscal agent represents any association), etc