The Latvian marketable law states that a merger is a sale in which the acquired company ceases to continue without going into liquidation, and its assets and liabilities are transferred to the acquiring company. Cross-border mergers may take two forms, consolidation, and acquisition. The acquisition is the process whereby the acquired company transfers its assets and liabilities to the acquiring company without the acquired company going into dissolution. Consolidation is the process whereby two or further different companies form a 3rd and transfer all their assets and liabilities into the recently formed company and the original company seizes to live without dissolution. As a result of the cross-border reorganization, a company registered in Latvia is intermingled with a marketable company registered in another Member State of the European Union or Norway, Iceland, or Liechtenstein. In the case of cross-border reorganization, the vittles of the Commercial Law relating to the junction of capital companies shall be applicable, taking into account the specific vittles of the cross-border junction laid down in the Commercial Law.
The Cross-border merging process
The process of reorganization of the company involved in the reorganization shall be carried out in agreement with the nonsupervisory enactments of the Member State in which the applicable sharing company is registered. There are no different cross-border junction rules between companies in different areas or specific sectors. The reorganization shall be carried out in two stages.
The amended company must initiate the reorganization process by submitting the amended draft reorganization contract to the Enterprise Register. That is if the draft reorganization agreement has been submitted to the Enterprise Register and is attached to the company enrollment case. A meeting of members shall, not earlier than one month after the publication of the draft amended reorganization agreement, examine the draft contract and decide on reorganization. However, the announcement to creditors shall be repeated after the decision of the meeting of the members. If the company had formerly issued a notice to creditors regarding the reorganization in the formal publication Latvijas Vēstnesis.
At the same time, it should be noted that if one of the companies involved in the reorganization changed the name or was converted into another type of company during the reorganization, it shouldn’t be considered as the base for amending the draft reorganization agreement.
According to Commercial Law, members/ shareholders have the right to share and bounce at the meeting or to bounce before the meeting. Which is fully stated in the Explicatory to Remote Participation in Meetings of Members, Shareholders, and Members.
Documents to be submitted
- Draft reorganization contract.
- Announcement of reorganization by each company.
- A copy or a duplicate thereof, or a printout of online bank payment, or information regarding the payment of the State fee. The national fee is outstanding independently for a duplicate of the draft contract of each company.
- The time limit for the submission of documents in the Enterprise Register is 14 days from the drafting of the draft reorganization contract
Where a cross-border merger by acquisition is carried out by a company that holds 90 percent or further, but not all of the shares and other securities conferring the right to select/vote at general meetings of the company or companies being acquired. Reports by an independent expert or experts and the documents necessary for scrutiny shall be needed only to the extent that the public law governing either the acquiring company or the company being acquired so requires, in agreement with Directive 78/ 855/ EEC.
Whereas acceptable attention should be concentrated on the opinions and well-being of workers and participants, both of which are important stakeholders in fiscal institutions witnessing cross-border merging and acquisition.