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Company

A company is a business organization. It is an association or collection of individual real persons and/or other companies, who each provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. This collection, group or association of persons can be made to exist in law and then a company is itself considered a legal person. The name company arose because, at least originally, it represented or was owned by more than one real or legal person.

Company forms in Latvia

Entrepreneurs usually register the following types of undertakings:

*) limited liability company (SIA);

*) joint stock company (AS);

*) representative office;

*) branch.

Limited liability company (SIA)

Status: a limited liability company is considered a legal entity - (legal person). Thus, the company is liable for its obligations to the extent of its entire property. A founder or shareholder is not liable for the limited liability company`s obligations, as well as the limited liability company is not liable for the founder`s or shareholder`s obligations.

Equity capital, (share capital): the minimum equity capital at the moment of company establishment is LVL 2000 (about EUR 2820). The equity capital contribution can take the form of both cash and property contribution.

Founder: one or more persons can be the founder(-s) of a limited liability company, and they can be both natural persons and legal entities. The founder may be a resident or non-resident of the Republic of Latvia.

Management body – the decision-making body of a limited liability company is the board and, if needed, the council. The board consists of one or more natural persons who may be residents or non-residents of the Republic of Latvia.

Joint stock company (AS)

Status: a joint stock company is considered a legal entity - (legal person). The company is liable for its obligations to the extent of its entire property. A founder or shareholder is not liable for the joint stock company`s obligations, as well as the joint stock company is not liable for the founder`s or shareholder`s obligations.

Equity capital,(share capital): the minimum equity capital at the moment of company establishment is LVL 25 000 (about EUR 35210). The equity capital contribution can be made only in the form of a cash investment.

Founder: one or more persons can be the founder(-s) of a joint stock company, and they can be both natural persons and legal entities (legal person). The founder may be a resident or non-resident of the Republic of Latvia.

Management body: a joint stock company is managed by a shareholders meeting, council and board. The council is a body representing the interests of the shareholders meeting and monitoring activities of the board. One or more natural persons can become members of the board, and they may be residents or non-residents of the Republic of Latvia.

Representative office

Representative office is a foreign undertaking without the right to conduct business. Foreign undertakings or organisations may establish representative offices or register official representatives in the Republic of Latvia; however, representative offices (representatives) do not have the right to conduct business.

The objective and task of such representative offices is mostly the promotion and advertisement of a foreign undertaking or organisation in the Republic of Latvia or the Baltic region as a whole, as well as market research usually in the relevant geographic market and/or relevant product market.

The representative office is a part of a foreign undertaking or organisation, which is situated in the territory of the Republic of Latvia and is not considered an independent legal entity (legal person).

Branch

A branch is an independent unit or part of a foreign undertaking conducting business in the territory of the Republic of Latvia on behalf of the foreign undertaking; however, it is not considered an independent legal entity.

The foreign undertaking being the parent enterprise is fully liable for the activities and obligations of its branch.

This page was last modified on 06 May 2014 at 12:39.

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