In Latvia, a Divestiture is an event where the company is divided and part of its property is transferred to one acquiring company or to several companies of such. The divided company continues to exist; the acquiring company becomes a newly established company. 

All or part of the shareholders in the event of division becomes shareholders of the acquiring company in accordance with the agreement of the decision on the separation of the company. There are two stages carried out in the reorganization process.

1. The company starts over with the contract by sending it to the enterprise register as a draft reorganization agreement and attaching it to the company’s registration case after making changes.
2. Participants get together no sooner than a month after the revised draft agreement is made public to look over the contract and make a decision about it. 

The company has to tell its creditors about it in the official newspaper of Latvia, “Latvijas Vestnesis,” after its members have decided on it.

Also, changing the name of a company or turning it into a different type of company is not a reason to change the draft of the agreement, even if it is done by one of the companies involved in the process. Documents that need to be sent to the business register include:

1. A draft of the decision
2. Notification of process from each of the companies
3. A copy of the receipt, a printout of online bank payment, or information about paying the state fee. Also included is the national fee, which each company pays differently for the contract draft.

Paying the Fees

Before submitting the documents for registration, the state fee must be paid. The business register makes sure that the state fee is put into the account for the treasury. The state fee is paid by transferring the money to any bank two days before the documents are sent electronically or by mail.

The cost to the state is 65.00 EUR.

Submitting the Documents 

The document and application are sent to the enterprise register by the management board or a person who has been permitted to do so. They used the following:

Electronically signed e-address or e-mail or by mail

Minutes of the Shareholder Meeting

One month before the draft reorganization decision is made public, the shareholders of the company that will be split up meet to talk about it and make a decision about the reorganization.

A few people sign the minutes of the shareholders’ meeting. These include the person in charge of the meeting, the person in charge of the minutes, and at least one shareholder chosen by the meeting to do so.

When more than one shareholder signs the protocol as proof of correctness, this is called a “statement of correctness.” It’s important to note that the document has:

1. The company/firm name
2. The number of shareholders at the meeting recorded in the minute
3. The location and date of the meeting
4. The number of subscribers for the company’s fixed capital, paid-up fixed capital, and voting capital subscribed by the company
5. The numbers of present voting shareholders and the size of the share capital represented at the meeting
6. The meeting leader, recording officer, attendee- protocol correctness attestation names
7. Agenda of the meeting
8. Decisions taken
9. Votes were cast in favor and against using the payment
10. An objection of the members presents at the meeting.

The decision is made by the vote of the majority of shareholders at the meeting. If there is no higher number of votes required by statute or law, the register of undertaking receives the original or a copy of the protocol or decision, with the correctness specified and signed, as the original as the decision was made.

Announcement to the Creditor

The shareholders of the company that will be changed look at the draft of the reorganization decision a month before it is made public and decide on the reorganization.

The official gazette tells all of the company’s creditors in writing about the reorganization. This happens 15 days after the decision was made by the companies involved. This must be in the announcement:

1. The Name, registration number, and legal address of the company are to be divided;
2. The Name, registration number, and legal address of other companies involved in the reorganization
3. The type of reorganization
4. The fact that the decision of the reorganization has taken
5. The Locations where these creditors can submit their claims and the time of the creditor claims may not be less than one month from the date of publication of the notification.