A stock company also known as SC or AS is a corporation whose shares and stocks can be publicly traded. If shares are sold to the public, it is a joint-stock company. The Enterprise Register allows the registration of stock companies only but has no registers on shareholders, thus it shouldn’t be informed of changes in the structure of shareholders. The minimum equity for AS is EUR 35, 000.
Divisions with establishing a new company
The process of splitting a stock company is broken down into two simple phases.
When there is to be a split, the company has to transfer all its properties to at least two of the acquiring companies and cease to exist without liquidation. Shareholders of the corporation automatically become shareholders in the acquiring firms according to the decision agreed in the reorganization document.
Draft reorganization decision
The organization to be divided has to draft a reorganization agreement and submit it to the Enterprise Register, attached to the company registration form. In the case whereby it is amended after submission, a copy of the amended draft should be presented to the Enterprise Register and a meeting held one month after its publication, to examine the content of the draft contract. Note that if any of the companies in the reorganization changes its name or structure, the draft reorganization agreement does not have to be amended.
Payment of Fees
A state fee is charged upon submission of documents for registration. It takes at most 3 days to process the fee, as the Enterprise Register has to verify the fee has been credited to the Treasury account. The state fee for all companies is EUR 65,00.
The Treasury (Valsts Kase)
Reg. No 90000050138
Submitting the documents
A business owner must submit the following documents:
- Draft reorganization decisions from each company
- Notices of reorganization
- A receipt or a copy of the payment of the State fee, etc.
- The time limit for the submission is 14 days after the drafting reorganization contract.
- The agreement should specify the following:
- business names
- registered offices
- registration numbers of all the companies
- Division of shares among members of the acquiring company
- Rules for transferring purchasing company’s shares to divided company shareholders
- The time the transferred capital shares are entitled to a dividend
- The aftermath for employees of the company to be divided
Announcement to the creditors
Within 15 days from the date the decision is taken to reorganize, the company being divided has to forward written notice of reorganization to all creditors of the firm. It has to also publish another notice in Latvijas Vēstnesis to inform creditors of the reorganization. These notices have to provide the following details:
- Firm names, registration numbers, and registered offices of all companies involved
- Type of reorganization
- A document showing that a decision was made to reorganize
- Place of application for claims by creditors and a time limit
After submitting all documents required and informing creditors of the reorganization, the final phase has eight simple steps.
- Provide minutes of the meeting of shareholders
- Check the name
- Articles of Association
- Shareholders’ register
- Complete the registration form
- Certify the signatures
- Payments of fees
- Submission of documents
Having secured all creditors’ claims at most three months succeeding the date of publishing the notice, the company has to file for an application to the Register to make an entry as regards the reorganization into the Commercial Register. It has to apply to the new corporation (if such exists). It takes three working days to complete phase two and a fee ranging from 150,00 EUR must be paid. Documents to be submitted for the processing include an application form KR12 of the firm being divided, the reorganization agreement or a certified copy, the minute of the meeting of shareholders, a list of members who had voted against the reorganization, a permit for reorganization (if required), etc.