Directors are necessary for both private and public limited liability firms in Latvia, as well as a board of directors and supervisory board. The directors of Latvian businesses are essential to the achievement of the organization’s objectives. Directors are accountable for their decisions and have obligations.
The duties of the management board of Latvian companies
The memorandum or articles of association of a corporation will often outline the duties and obligations of the directors. The day-to-day management of businesses in Latvia is the responsibility of the board. The directors of a company are required under Latvian Commercial Law to oversee and maintain the smooth operation of the business.
It must make decisions regarding financial matters including tax payments and maintain the financial balance. It is required under Article 171 of the Company Law to be devoted to the business and to follow the rules established by the shareholders at general meetings.
Latvian directors are prohibited from forming partnerships with outside parties in firms that compete with the one they oversee, from engaging in any other business dealings in the same industry, and from performing the same functions for many companies at once.
The members typically must comply with a set of non-compete rules. The directors are also required to keep firm secrets confidential. Members are required by Article 169 of the Commercial Code to perform their duties with care and diligence.
The liabilities of Latvian directors
According to Latvia’s Commercial Code, unless the directors can demonstrate that they operated carefully and deliberately, they will be held accountable for any harm done to the company. They will also be held responsible for administrative issues including failing to file paperwork with the Companies Register or providing misleading information.
In accordance with the Criminal Law, they may also be held accountable to creditors and other third parties, as well as for criminal offenses.