Establishing an association usually requires at least two persons, corporations, or partners with similar objectives in mind. The aim of an association is specified in the articles of association prepared by the board associates. Registering an association takes at least seven days to process. When founding members of an association agree to reorganize it, because of certain risk factors restraining its operations, the process may occur in three means: acquisition, merger, and division. The division is said to occur when an association transfers its property to one or more acquiring associations by dividing or apportioning. If it is divided, an association must transfer all properties to two or more associations and terminates itself with no liquidation.
When it is apportioned, the entity has to hand over part of its property to a procuring entity or several entities. In case of a divestiture, the association is allowed to exist. An acquirer can be newly founded or existing already. All entities in the reorganization must present certain documents to the Enterprise Register at most three months afore the publishing of the notice of division in the official publication ‘Latvijas Vēstnesis’.
For an association thinking of transferring its property or a business owner interested in learning about the division of an association, this article provides information on the process of division of associations and the steps to it.
Steps to the division of Associations
The process of division has three steps, which may take seven days to complete. The steps include completing the registration form, payment of the state fee, and submitting of necessary documents.
Completing the registration form
When the intent to divide, split or separate a part of the property of an association is declared at a meeting of board members, the next step is to prepare the necessary documents. Afterward, an application form should be obtained from the register and filled out. The form must be signed by all members of the board of management, given the form of representation rights stated in the Act. When the members are unable to sign, a representative may be hired by power of attorney. Note that subsequent information must be in the form:
- Names of the associations
- Information of the board members
- Legal addresses
- Date when the decision to divide was made, etc.
Paying the state fees
To complete this process, a state fee applicable to the registration must be paid by the association two days afore it applies. The fee should be paid to the treasury account at any bank within the country. After the payment is confirmed, the application is processed and a certificate is issued. The fee for all associations included in the reorganization is EUR 8, 54 each; it should be paid to the account with the following details:
Reģ. Nr. 90000050138
Valsts Kase, Konts: LV84TREL1060190913200
The state fee for registering a new association is EUR 11, 38, to be paid to the same account.
Submission of required documents
For the application for the division to be registered in the Enterprise register, the applicant must tender requested documents by the authorities. These documents are to be submitted no earlier than three months before publishing the notice to reorganize in Latvijas Vēstnesis. Examples of such documents are:
- Application form B6
- Reorganization agreement or endorsed copy (if there are two or more associations)
- Report of the meeting of board members
- Statutes of the acquiring association
- Receipt or copy of the payment of state fee
- List of members of the board in the acquiring association
- Power of attorney (if any association is represented by a fiscal agent), et cetera