Dividing a company without establishing a new company means that; the company will transfer part of its property to one or several acquiring companies
In this event, the company continues to exist and all or part of the shareholders of the company divided become members of the acquiring company following the company’s separation. The reorganization is carried out in two stages:
- The company reinitiates the reorganization contract, submitting it to the enterprise register as a draft reorganization agreement, attached to the company’s registration case after amendment.
- A meeting of participants is held no earlier than a month after the publication of the amended draft agreement to review the draft contract and a decision regarding the reorganization is taken.
It is necessary that the company after the decision of its members, publish in the official gazette of Latvia ‘Latvijas Vestnesis’ informing its creditors concerning the reorganization. it is also repeated after the decision of the meeting of the members.
If one part of the company involved in the reorganization, change its name or transforms into another type of company during the reorganization, it will not be considered as the basis for amending the draft organization agreement.
According to commercial law, members/shareholders have the right to participate and vote at the meeting either remotely or before the meeting. Documents submitted include:
- Each company’s copy of their draft reorganization agreement
- A Notice of reorganization by each company
- A copy of a receipt, a printout of online bank payment, or information regarding the payment of the state fee. For the national fee, it is paid separately for a copy of the draft of the contract of each company.
The companies must submit the document to the enterprise register 14 days from the drafting of the reorganization.
Paying the Fees
The state fee is paid before submitting the documents for registration. The enterprise register makes sure the state fee is credited into the treasury account. The state fee is effected using a transfer to any bank 2 days before submitting the documents either electronically or by post.
The state fee for each participating company is EUR 65.00, and the national fee is paid separately for a copy of each draft public contract, in the situation of the two participating companies, they paid EUR 130 each.
Submitting the Documents
The management or an authorized person submit the document through an Electronically signed e-address or e-mail and by Post.
Minutes of the Shareholder Meeting
Each of the participating company shareholder’s meetings examines the draft contract, this is no sooner than a month after the publication of the draft of the reorganization agreement.
The minutes of the meeting of shareholders are signed by a few persons which include the leader of the meeting, the minute holder, and at least a shareholder elected to do so by the meeting.
A statement of correctness is when more than one shareholder is included to sign as proof of correctness, they all sign the protocol. It should be noted that the document contains:
- The company/firm name
- The number of shareholders at the meeting recorded in the minute
- The location and date of the meeting
- The number of subscribers for the company’s fixed capital, paid-up fixed capital, and voting capital subscribed by the company
- The numbers of present voting shareholders and the size of the share capital represented at the meeting
- The meeting leader, recording officer, attendee- protocol correctness attestation names
- Agenda of the meeting
- Decisions taken
- Votes were cast in favor and against using the payment
- An objection of the members presents at the meeting
The decision taken is by the vote of the majority of shareholders at the meeting. If there is no specified higher number of votes by the statutes or the law, the register of undertaking receives the original or derivative of protocol or decision, the correctness specified and signed, as the original as the decision was taken.
Announcement to the Creditor
The shareholders of the company to be transformed, examines the draft a month earlier after the publication about the reorganization decision and decide on the reorganization.
A written announcement to all creditors of the company about the reorganization is published in the official gazette, this is 15 days from the date of the decision by the companies involved. The announcement is required to contain:
- The Name, registration number, and legal address of the company to be divided
- The Name, registration number, and legal address of other companies involved in the reorganization
- The type of reorganization
- The fact that the decision of the reorganization has taken
- The Locations where these creditors can submit their claims and the time of the creditor claims which may not be less than one month from the date of publication of the notification