Company formation in Latvia - Joint stock company

Joint stock company is a commercial company whose equity capital consists of the total amount of the par value of the stocks. The stock company is an open company and its stocks may be the subject of public circulation. The company is a legal entity.

What information is recorded to Register of Enterprises about Joint Stock Company:

  • Name of company (firm);
  • Name, surname, personal code, address of members of board of directors and members of supervisory board;
  • Rights for members of board of directors to represent company jointly or individually;
  • Amount of equity capital, amount of subscribed and paid equity capital;
  • Legal address;
  • If authorization issued, then name, surname and personal code of authorized person (company secretary), reference on joint authorization authorization of branch, rights to conclude special agreements regarding to immovable property, as well as rights of authorized person to represent merchant jointly with one or several members of board of directors or individually.

Information necessary for registration:

  • Name (firm) of company;
  • Legal address of company;
  • Information about founders (shareholders) of company (for individuals – name, surname, personal code and address and for legal entities – name, registration number, legal address, name, surname, personal code, post and residential address of the representative who on behalf of the legal entity signs the memorandum of association);
  • Information about member of boards of directors of company (name, surname, personal code and address);
  • Information about members of council of company (name, surname, personal code and address);
  • Information about auditor of company (name, surname, personal code and address);
  • Information about equity capital of company (including information about amount of equity capital, payment method and payment conditions);
  • Depending on requirements of founders (shareholders) may be necessary additional information (for example, if shareholders decide to constitute supervisory board, then information about members of supervisory board is necessary).

Foundation and registration of company may consist from following stages:

  • Collection of information necessary for registration;
  • Preparing of documents necessary for registration;
  • Signing of documents (including of notarial certification of signature);
  • On most cases is necessary to open temporary account in bank and pay statute capital;
  • Doing payments necessary for registration;
  • Submission of documents to commercial register;
  • Receiving of examined documents.

Status of company – legal entity. Has rights to do all economic activities according to legal norms (for some activities license and other preconditions are necessary).

Payments necessary for registration. State duty 250 LVL, payment for publication 24 LVL. Additional payments – for certification of signature, bank services and preparing of documents.

Involvement in registration process: Providing of necessary information for registration. Founders must sign necessary documents. Signature of founders on application must be testified by sworn notary. Need to open temporally bank account and pay in money for payment of equity capital. Members of board of directors must sign necessary documents and testify signature by sworn notary.

Management of company: Company's management institutions are meeting of shareholders, board of directors and supervisory board (council). Meeting of shareholders can decide all questions relating to company. Board of directors is executive body which manage and represents company (operative management of company). Board of directors is appointed and revoked by meeting of shareholders. Supervisory board is supervisory institution of company.

Founders: Natural (individuals), legal entities and personal society. Minimal number of founders - one. No restrictions for foreigners.

Equity capital and shares: Equity capital must be not less than 25000 Latvian LVL. Until submitting of application to commercial register must be subscribed all share capital of joint stock company and amount of paid statute capital can not be less than LVL 25000 and not less than 25% of subscribed share capital. Until submitting of application to commercial register share capital of joint stock company can be paid only by money.

Council: Minimal number - three individuals (no legal entities). But if shares of company are in public circulation, then minimal number of council are five individuals. Maximal number of members of council are twenty. Foreigners also may be members of council.

Board of directors: Minimal number - one individual (no legal entity). But if shares of company are in public circulation, then minimal number of board of directors are three. Foreigners also may be members of board of directors.

Name of a company: Only letters of Latvian and Latin alphabet are allowed. Should not be identical or confusingly similar on already existing ones. At the beginning or end of the name must be words (in Latvian) "Joint stock company" or "AS". Should not consist false information about circumstances important in commercial activities. Should not be in conflict with good manners. Must not include names of Republic of Latvia (also translations), governmental and municipal institutions and name ''government'' and ''municipality''.

Legal address. Legal address must be located in Republic of Latvia.

Meeting of shareholders. Decisions can be made without calling a meeting. If meeting is called it may be hold in any part of the world.

Term of registration: 3 working days from day, when necessary documents are submitted to Register of enterprises.

Documents received after registration. Certificate of registration, decision of notary of Register of enterprises, Articles of Association.