Persons, corporations, or associates with akin purpose, working toward achieving it, found foundations. Registering a foundation within this country requires a minimum of two individuals as founding members and takes seven days to process. A foundation is a form of organization, which engages in limited commercial activities to raise its revenue. The main source of revenue is usually a fund set up by the founders. In the event of factors that might delimit the functioning of a foundation, it can decide to reorganize itself. This may occur in three forms; transferring property to another foundation (acquisition), transferring all assets to a new foundation, and full or partial transfer of property by splitting (division).
What a merger is
When two or more organizations donate their assets to a newly constituted foundation, a merger occurs (the acquirer). In the event of a merger, the transferring organization is not needed to dissolve the firm, its board members become part of the registered foundation, and all rights and responsibilities are assumed by the acquiring organization. Three months before the publication of an announcement of a merger in the official magazine ‘Latvijas Vstnesis,’ all participating foundations in a merger must submit the required documentation to the Enterprise Register.
If you have a foundation and contemplating a merger with another, or you are simply fascinated with learning about how to reorganize an organization, this is a guide on the merger of foundations in the country.
Process of merging foundations
There are three steps involved in merging two or more foundations. They include:
- Completing the application form
- Paying the state fee
- Submitting necessary documents
Completing the application form
One has to first make the decision to merge the foundation before preparing the articles of association, which has to declare the motive for choosing a merger. Once that is done, filing the application form and submitting it to the Enterprise Register comes next. The form should be filled out and duly signed by the management board of the transferring and acquiring foundations. When either is unable to sign, a trustee backed by a notary mandate is allowed to stand for the foundations. The following details must be in the form:
- Names of the foundations
- Legal addresses
- Date when the decision is made
- Information on the board members, etc.
Paying the state fee
The state fee is a payment made two days before submitting the application form and necessary documents. Once the register verifies the deposit to the treasury account, it processes the registration and a new organization is established. After which a certificate of registration is issued. The fee for all foundations in the merger is EUR 8, 54, payable to the account with the following details
Reģ. Nr. 90000050138
Valsts Kase, Konts: LV84TREL1060190913200
The state fee for registering a new foundation is EUR 11, 38, payable to the same account.
Submission of required documents
For the processing of an application to register a merger, the foundations are to present the required documents alongside form B5 to the Enterprise Register electronically or by post. These documents have to be presented no less than three months before the notice is published in Latvijas Vēstnesis. The required documentation is:
- Application form B5
- Reorganization agreement or a certified copy
- Extract of the board members’ meeting
- Articles of association of the acquiring foundation
- Receipt, copy, or online printout of the payment of state fee
- List of management boards in participating foundations
- Power of attorney (for any foundation represented by a fiscal agent), et cetera.
Note that documents signed with a secure electronic signature issued abroad are accepted.