Stock Companies (AS/SC) are entities that sell shares and stocks to the public. it is the only form of the stock company recognized by the Enterprise Register. A merger between two or more companies must be fused. Fusion occurs when at least two merging companies transfer all properties to a new company called the acquiring company. When there is a merger, the merging company ceases to exist without liquidation. All rights and obligations are then transferred to the acquiring company. 

Merging a company

This process is split into two stages, each having distinct steps. 

Stage one

When companies merge, the merging firms have to transfer their properties to the merged entity. Automatically, the shareholders are now shareholders of the new establishment, unless stated otherwise in the Reorganisation agreement. 

Draft a reorganization agreement

Each merging corporation has to draw up a draft reorganization contract to be signed by the Board of Governors of each company. When there is a reason to amend this contract, a copy of the amended draft has to be submitted to the Enterprise Register and a meeting shall be held to examine the changes, at least one month after publication. The document should contain but is not limited to the following:

  • Firm names and office address
  • Allocation of shares amongst shareholders
  • Rights are given to members of the supervisory bodies, and executive bodies of the new company
  • Plans for employees of the merging companies, etc.

Payment of fees

The process is charged a state fee of EUR 65,00 when companies submit the required documents. In total, it takes three days to complete. A national fee of EUR 65 is paid for a copy of the draft contract for each company. Companies shall enter the following details during payment:

  • Name: The Treasury (Valsts Kase)
  • Reg. No 90000050138 
  • Account: LV84TREL1060190913200
  • Purpose of payment
  • Name and service for the payment

Submission of documents

The application and the documents to be attached have to be submitted by the Management Board or by authorized persons via e-mail or by post. Electronically signed documents can be sent to the Enterprise Register. The consignment must be delivered with a payment order for the national fee. All merging corporations are required to submit these documents for merging:

  • Published Notices of reorganization
  • Receipts of payments
  • Names, addresses of the companies, etc.
  • Evidence of division of shares among members of the acquiring company
  • Transfer regulations for acquiring corporations’ capital shares, etc

Announcement to the creditors

An SC has to inform all known creditors of the decision to merge within 15 days of making the decision. This should be in the form of a written notice to them and by publishing in the official publication known as Latvijas Vēstnesis. Some of the information the notices must contain are listed below: 

  • Business Names, registered company addresses, numbers, etc. of all companies in the merger
  • The type of reorganization
  • Evidence of the decision to reorganize (a copy of the draft reorganization contract)
  • Placed applications for claims by creditors

Stage two

When all claims by creditors have been secured after publicizing the notices of reorganization, the firm may then apply for the merger to be entered into the Commercial Register. Once this is done, the corporation has to carry out the following activities. 

  • Conduct Shareholder Meeting
  • Check the name
  • Prepare the articles of association
  • Check the company address
  • Fill out the registration form
  • Certify all signatures
  • Pay the required fees 
  • Submit the necessary documents

Required documents 

The following documents are needed to process the merger of stock companies:

  • An application form KR12 for the firms
  • The reorganization agreement or a certified copy
  •  Auditor’s view submitted by each company 
  • Financial statements of closing from each merging company 
  • Application form KR4 or KR3 for the firm to be certified

Note that the deadline for submission is at most two weeks after completing all operations and at least three months after publicizing the notices of reorganization.