Divisions, Mergers, and changes in the form of Latvian companies fall under the reorganization rules. The following is the summary of the main legal points which must be taken into account in reorganizations in Latvia.
Mergers
Merging can take the form of acquisition or consolidation. An acquisition is a process in which the acquired company transfers all of its property to the acquiring company.
A consolidation is when two or further companies transfer all of their property to a recent innovative acquiring company.
In the case of a merger, the acquired company ceases to live without liquidation procedures. All the rights and scores of the acquired companies are transferred to the acquiring company. The shareholders of the acquired companies shall become shareholders of the acquiring company.
Division of companies
The division is a process by which the dividing company transfers all its property to one or further acquiring companies through divesting its sets. The dividing company transfers all its property to two or further acquiring companies and ceases to live without liquidation procedures. But in the case of divestiture, the dividing company transfers part of its property to one or further acquiring companies and the dividing company shall continue to live. The acquiring company can be a former company or a recently innovated company.
All the shareholders of the dividing company or part of them become shareholders of the acquiring company. Alternatively, the dividing company can become the sole shareholder of the acquiring company in agreement with a decision regarding the divestiture of the company.
Restructuring
Restructuring is a process in which a company is restructured into a different type of company through acquisition. All rights and scores of the restructured company are transferred to the acquiring company and the restructured company ceases to live without liquidation procedures. The shareholders of the restructured company become shareholders of the acquiring company.
Merger control is obligatory if:
- The aggregate Latvian development of each of at least two incorporating
parties are at least1.5 a million EUR.
The turnover comprises the quantities deduced from the trade of products and the provision of services in the previous fiscal year. VAT and other deals levies aren’t included.
Development is assessed for the entire group of the acquirer and for the target ( including all realities directly or laterally controlled by the target). A dealer’s development isn’t considered. Group development comprises all realities controlled, directly or Laterally, by the party to the sale and all realities controlling. directly or laterally, the party to the sale and all realities controlled, directly or laterally, by the realities pertained to in double addition of development isn’t permitted, thus no account is taken of development performing from Sintra-group deals. If realities pertained to comprising a common adventure, the entire development of the common adventure is considered ( i.e., not just a part of the development in proportion to the group’s interest in the common adventure). There’s no exception for development not falling within the undertakings. Where the target is an asset, the development of the target is the quantum Demesne, the quantum corresponds to the value of deals from the separate demesne, not ( factual or ideational arm’s length) rent. The fact of the announcement, along with the names of the realities involved and a brief citation of the profitable conditioning concerned. The form itself or any details about the procedure typically are not Published. The Latvian authority has started a policy geared towards near scrutiny of the profitable environment within which a sale occurs. In pre-and post-filing communication with the authority, the notifying parties are requested to give further detail about the requests and the backing of the sale. Statistics on control of concertation are public.
