A stock company (AS/SC) is a type of entity that sells its shares or stocks to persons and corporations aside from its original shareholders. The only kind of stock company allowed to operate in the Republic by the Enterprise Register, when shares are publicly sold, they are known as a joint stock company.
If you are considering establishing one within the republic or thinking of setting up this company as an investor, this guide provides everything you need to know about stock companies operating in the country.
Features of a stock company
Several features distinguish entities from each other aside from their similarities.
Shares are like securities paid by partners setting up an SC. They are known as shareholders and the share they contribute makes up the share capital required to establish the entity. Shares not only give shareholders the right to make decisions about the entity but they are also paid dividends on either a monthly or yearly basis. AS can issue different shares having different amounts of rights. The larger the size of the share one has, the more right he or she has in the company. All information about the shareholders is registered in the register of shareholders. The minimum value of one share is 10euro cents.
As with other entities, corporate bodies and individuals can be shareholders of an SC. The minimum number of shareholder the entity can have is one, with an unlimited maximum amount. Foreign business owners and companies can be owners of shares too, but certain conditions may apply. The rights of a shareholder are depended on the number of shares he or she has in the company. Shareholders make decisions on how profits are distributed, and members of the board are appointed, dissolved, and liquidate the business.
The minimum amount of share capital this entity can have before it is registered is 35,000 euros. The paid-up share capital must be up to EUR 35,000 before the company is allowed to operate. However, for certain companies such as a life insurance company, the minimum share capital is larger.
Registered business address
As with all business structures, a stock company must have a legal address registered with the Enterprise Register. This address must satisfy the requirements and be a place within the territory.
Management board and council
The board is a group of people appointed by the shareholders to take charge of the operations of the company. The minimum number of members is one person, but when the shares have been publicly sold, as in a JSC, it becomes three persons. The members represent the company as specified in the articles of association. Usually, the council appoints the board of directors for five years or less. The Council controls the company and has a maximum of 20 members. Elected by the shareholders, it has the right to check the registers, documents, flow of cash, and other properties of the business.
The business name is very important and must be unique. It must be in Latin and Latvian letters only and must be distinct from other business names registered in the Enterprise Register.
Registering a company is easy in this country. All one needs is the right information. To register a stock company with ease, simply follow the steps below:
- Prepare the documents for registration
- Pay the share capital
- Make necessary payments for state duty, publication fee, etc
- Fill out the application form
- Submit the documents to the Register of Enterprises
- Obtain reviewed documents
The following information is required in the documents to be presented:
- Company name
- Activities of the business
- Legal address
- Size of the share capital
- Category of the shares (if any)
- Information about shareholders, board, and council members