Company liquidation in Latvia
Company liquidation in LatviaUpdated on Friday 19th April 2019
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The company liquidation process begins when a Latvian company can no longer meet its financial obligations to its creditors. Financial difficulties are caused by several factors and when a company owner decides to end the activity of the legal entity, he must fully terminate the existence of that company by de-registering it from the Companies Register.
There are two types of company liquidation in Latvia: voluntary or compulsory. The voluntary liquidation is usually requested by the members of the company, while the compulsory liquidation is requested by a third party with interests in the company, with the help of a specialized court.
The steps for company liquidation in Latvia
The voluntary liquidation of a Latvian legal entity must be approved by the general meeting of the shareholders or by all the general partners of a partnership. During this meeting, an individual must be appointed in order to carry all the actions, the liquidator, who is also liable for his actions during the liquidation process. This liquidator can be a former manager or owner of the entity or an independent one. He will oversee the entire process and will pay the creditors according to their priority as well as handle the sale of any remaining company assets.
The decision must be registered in the Latvian Register of Enterprises no later than 15 days from the decision. The name and details of the liquidator must also be registered.
Documents needed for company liquidation in Latvia
There several documents required to start the liquidation of a Latvian company:
- a signed application for deleting the company,
- the minutes of the meeting where the decision of liquidation was taken or the decision of liquidation,
- the name, address and ID of the liquidator,
- the notarized sample of the liquidator’s signature,
- a proof that the registration tax was paid.
After depositing the above to the Register of Enterprises, the authority will inform the official gazette regarding the new status of the company.
The first step is inviting the creditors to deposit their claims in a period of time not exceeding three months. The liquidator will organize the company’s documents, sending them to the State Archives and will prepare a balance sheet where the company’s assets are shown. During this time, any activity can be carried in the name of the company, but only if it can lead to liquidation.
Only after satisfying in full the claims of the creditors, the remaining assets can be delivered to the entitled shareholders.
After ending the process, the company is deleted from the Register of Enterprises by delivering the following documents:
- a signed application for deletion,
- the company’s original registration certificate,
- the proof from the State Revenue Services that all the company’s debts were paid from,
- the proof that the registration fee was paid.
The duration of the company liquidation process
Usually, the process of company liquidation in Latvia may take from a few months (when the claims are easy to be satisfied) to a few years if there are many claims to cover. In fact, the process of liquidation can be reopened if there are new claims to be covered which were not deposited in time and if it is discovered that the company had extra assets.
Our law firm in Latvia can provide more information about the liquidation and dissolution procedure for foreign investors as well as how to handle a bankruptcy case.