A limited liability company (LLC) is a corporation that acts in numerous aspects like limited cooperation. The LLC elects to be taxed as a pass-through. Almost all LLCs choose to be tested as pass-through realities with no taxation on the commercial position. Rather, earnings and profit gains are passed through directly to the shareholders, who are known as members. The liability of a member to the corporation is limited to the quantum invested, suggesting limited cooperation. LLCs are governed by a director who acts on behalf of all of the members. The director may be a member or a third party. In either case, the liabilities of the director are outlined in the LLC agreement. 

In the event of a divestiture, the company to be divided shall transfer part of its property to one acquiring company or to several similar companies. The company to be divided shall continue to live. The acquiring company is recently formed. In the event of a divestiture, all or part of the company being divided shall come members of the acquiring company or come the only member of the acquiring company, in agreement with the decision on the company’s separation. The reorganization shall be carried out in two stages. 

Limited Liability Company Divestiture 

Divestment is the trade of a business or an asset class that does not perform or meet the prospects of the company or a country. It helps associations to induce cash, thereby reducing debt and making the company more seductive with a low debt-to-equity rate. 

Still, the amended company must initiate the reorganization process by submitting the amended draft reorganization contract to the Enterprise Register. If the draft reorganization agreement has been submitted to the Enterprise Register and is attached to the company enrollment case. A meeting of actors 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. 

Paying the fees

The State fee must be paid before the documents are submitted for enrollment. Registration shall be made only after the Enterprise Register can make sure that the State fee is credited to the Treasury account. 

The State fee may be effected using a transfer to any bank 2 days before the submission of documents electronically. 

Submitting the documents 

The operation and the documents to be attached thereto shall be submitted by the Management Board or by a person authorized. 

Advertisement to the creditors 

Within 15 days of the date of deciding on the reorganization, the company to be divided shall order written notice of reorganization to all known creditors of the company. 

The company to be divided shall also publish a notice to creditors regarding the reorganization in the sanctioned publication Latvijas Vēstnesis. 

The announcement shall specify; 

  • Company establishment, enrollment number, and legal address. 
  • Enterprises, enrollment figures, and legal addresses of other companies involved in the reorganization. 
  • Type of reorganization. 
  • The fact that a decision on reorganization has been taken. 
  • Place of operation for claims by creditors and a time limit that may not be lower than one month from the date of publication of the notice.