Any company’s possessors’ members, friends, and shareholders can choose to wind up their company within the procedure of the shareholders’ voluntary, or a company can be closed, as a result of violations of nonsupervisory mandate when the controlling state institution initiates the procedure of mandatory ending down. In both cases, the result of the ending procedure will be the check of the company and its rejection from the Latvian Commercial Register.
In Latvia, there are three types of company liquidation
Mandatory -This is by a court decision, decision of the institution of the Commercial Register of Latvia or the State Revenue Service.
Freely/voluntarily – by decision of the possessors of the company who decide to close the company.
If the company was established for a certain period – After the expiration of a period specified by the papers of objectification.
The termination of the company must be applied for enrollment in the Commercial Register of Latvia. A record of closing the company will appear in the Commercial Register. Information on all companies registered in the Latvian Commercial Register (including whether the company is in the process of winding up.
Termination of activities grounded on a court ruling
The company may be terminated grounded on a court ruling if:
- The company does not submit documents by law to the marketable register.
- The paid-up capital of the company doesn’t meet the conditions of Commercial Law.
- Company commercial documents are contrary to the law.
- Company shareholders didn’t decide to close the company in cases where they should have done so in agreement with the law or papers of objectification. The claim to close the conditioning of the company may be filed by the board, board member, shareholder, Register of Enterprises, as well as third parties whose interests are affected.
Termination of the company based on the decision of the institution of a marketable register
The conditioning of the company may be forced to be terminated, and the company will be closed, grounded on a decision of the Register of Enterprises if:
- The company has not bared to the register its true devisee proprietor.
- The company isn’t accessible at its legal address.
- The company has had no board members for further than three months.
The termination of the company grounded on a decision of the duty authorities
The conditioning of a company may be terminated, and the company will be closed grounded on a decision of the duty authorities if:
- The company has not submitted a periodic report within one month.
- The company within one month after assessing an executive penalty didn’t submit affirmations handed for by duty laws for a six-month period.
- The company’s exertion was suspended grounded on a decision of the duty administration.
The liquidation process in case of mandatory termination of the company
Still, any person interested in the ending of the company may apply for the position of liquidator, If a case on the ending of the company has been introduced in court. The court, deciding to close the company’s conditioning, approves the declared interested person for the position of the company’s liquidator.
Voluntary Liquidation – The decision to close the conditioning and start winding up the Latvian company is made by the meeting of the company’s shareholders. The liquidator has all the rights and scores of the administrative institution of the company, while he/ she has the right to conclude only those deals that are necessary for the liquidation of the company.
Completion of liquidation – After the creditors’ claims have been satisfied and all liquidation charges are covered, the liquidator:
- Prepares and delivers to the State Revenue Service of Latvia the final winding-up fiscal report of the company and the plan for the division of the remaining property of the company.
- Organize the transfer of company documents for the storehouse.
- Shares the remaining property of the company between the members in agreement with the plan for the division of property drawn up by the liquidator.
- Closes all bank accounts of the company;
- trains an operation to the Register of Enterprises of Latvia on the completion of winding up and request to remove the company from the marketable register.
A company is considered liquidated from the moment the decision is made by the Register of Enterprises to remove the company from the marketable register. However, also it no longer exists as a legal reality with all the preceding consequences, If the company is liquidated.