The process and steps involved while making changes to the composition of the Board of a Stock Company (AS) are somewhat similar to the Societas Europaea (SE). The rules may however differ widely in both cases.
Here we will try to understand the main steps of the process and steps to be taken while making composition changes on board an AS. To begin with, the advisory and the decision to make these changes are strategic in nature, hence can only be made by the Board itself. The decision is taken in a meeting specifically called for this person. The number of members of the Management Board and the extent of rights and size of shares shall at all times be in accordance with those of the Governing Board and shall be elected to perform for the period of 5 years.
The tenure of the board may be reduced where the statutes provide room for it. Another important thing to remember is that the member is deemed appointed immediately after the decision has been taken. Though in some cases the new member may, out of spite, withdraw from practicing his/her rights until formal notification.
Required documents and application
The application to be submitted for composition changes in the board of an AS, are us under:
- Form KR18 application (attested and certified)
- Minutes of the meeting in which the decision was taken
- Consent of the selected member to assume the charge as a member
- Revised list of the members of the board
- Leave notice of a member if he/she has resigned
- Receipt of payment, or printout of online payment of the state fee
The documents must be submitted within 14 working days from the time decision is taken.
It is required by the law that all and any composition changes made to the board be registered with the Company Register by way of application. The prescribed application form in this regard is called the KR18. The form must be signed by all the members of the Management Board; in case the member has resigned him/herself then the form shall be filled and signed by the same or a member who remains the member of the board.
Information regarding beneficial owners
Not required during the composition changes to and SE, however, in case the same changes are made to an AS, the KR18 application must also include information about the beneficial owners of the firm, if that has changed as well. If no change has been made in the beneficial ownership, then the same must be certified in the application.
The Company Law of Latvia defines a beneficial owner as a natural person who controls the firm as an owner whether directly or indirectly through holding and enjoys more than 25% of the voting shares.
The below information must be provided regarding the beneficial owner
- Name of the natural person
- Identity number (for non-resident; date of birth, date of issue and birth as mentioned on the identity document, country, authority that issued the document, etc.)
- Country of residence
- Way of direct or indirect control over the firm
Where the documents and applications are submitted by paper, the minutes of the meeting must carry the signatures. These minutes as well as the consent of the leaving member or the consent of a new member to assume charge as a member must also carry signatures. All these signatures must be certified in the following manner:
- A sworn notary in the Orphan’s Court if the procuration is in favor of a person who is a citizen of Latvia. For non-citizens, a sworn notary declares the place of residence.
- In case the documents are being submitted online, an E-signature with a time stamp shall be provided. Whereas if the document is supposed to be signed by more than one person, it may be electronically provided, only when all participants have an e-signature.
State fee payment
As per the rules, the state fees must be paid in full before the application is submitted. The fees may be paid via a pay order drawn in favor of the State Treasury Account, or in an online bank. In the case of the latter, the e-receipt must be attached with the documents.
It may take at least 2 days before the payment is reflected and takes effect; hence it is advised that the payment may be made at least 2 days before the submission of the application.
The state fees structure for registration is given in the table below
|State fee for composition changes in board
|Time In days
|Two or more changes
|Two or more changes