The term amendments include any form of change; addition, deletion, and edition. With reference to the Articles of Association specifically, amendments of any nature have to follow a set of procedures and rules. To ensure that the amendments fall within the legal protection of the law of the country, it is essential to understand the extent and nature of amendments allowed by the law in the first place.
The Commercial Law governing companies in Latvia spreads to all companies, whether local or foreign. The article of association of a company has the same fundamental importance to the company as the constitution has to a state. As such, any amendments made to this document must be in total compliance with the Commercial Law of Latvia. The law stipulates that the changes shall be notified to the Registry within 14 days of adoption.
The suggested amendments must be presented at a meeting that is attended by all stakeholders/members. The participation can be remote or in person, the law allows for both.
Convening for amendment & meeting minutes
Complete notes of minutes of the meeting must be penned; ideally by full-time note-takers or in their absence some employee or member of the company. Subsequently, the amendments suggested must also be noted and the minutes be signed by all the members present. A copy of the minutes shall be sent to the members participating remotely and a signature must be obtained therein as well.
Important details to be included in the minutes of the meeting are:
- Name of the company
- Participant Decision Number or Meeting Protocol
- Participants’ details: names, numbers, location and nature of participant’s presence, etc.
- Meeting location and date
- Share capital volume, paid-up fixed capital, and voting capital subscribed by the company.
- Details regarding the chair of the meeting
- Time and date of notification of this meeting
- Record for each vote cast in favor or against the amendments
Besides the above, the members may include any such detail considered important for future and current reference.
Decision taking
The Commercial Law stipulates that amendment(s) can only be applied if 2/3 majority of the votes are in favor of the amendment unless the statutes of the agreement specified otherwise.
Similarly, the correctness of the adopted procedure shall be verified and certified by the same person who signed the original articles of association – both the original, as well as the revised document, shall be submitted to the registry within 15 days from the day decision is taken.
Articles of association
As per the Commercial Law of Latvia, once the amendments have been inserted in the articles of association, the new documents be signed by the members/stakeholders and the officer who signed the meeting minutes.
The articles of association document must contain:
- Name of the firm
- Duration and purpose of the firm
- The volume of fixed capital, share distribution, and paid-up capital
- Representation in the Board of Directors or the management board and the rights thereof
- Number of members of the management board and the board of directors
- If applicable, name of various parts of the firm, operational categories, etc.
- Date of approval of the statute
Noteworthy, that the right of the management board to sign the statutes cannot be overpowered under any circumstance by a third party as the law considers these rights as exclusive to the board. Secondly, the article of the association shall only contain provisions and not details. For instance, it may point towards the number of officials and not the division of departments among them.
