Latvia:

LV - Who needs to register a business?

LV - Who needs to register a business?

All merchants, agricultural farms, fishermen’s households, individual companies, representative offices and representatives of foreign merchants, cooperative societies, European economic interest groupings, European commercial company, European cooperative societies, political parties and their alliances, administrators, insolvency subjects, remedy process and insolvency proceedings, associations and foundations, trade unions, mass media have to be registered.

LV - Purpose of business registration

LV - Purpose of business registration

The purpose of registration is to have registration number (as well as unified taxation number) to be able to carry out any activity in compliance with legislation: only contracts (anything where money is involved – payments, business operations etc.) with a stated registration number are valid and protected by the law.

LV - Legal basis

LV - Legal basis

Commercial activity in Latvia is mostly regulated by the Commercial Law ; however the Civil Law and the Group of Companies Law have considerable significance as well. Moreover in many sectors special requirements prescribed in various Acts or Regulations of the Cabinet of Ministers have to be taken into account.

Commercial Law

Civil Law

LV - Types of legal entities

LV - Types of legal entities

There are different forms:

  1. A limited liability company is a commercial company whose equity capital consists of the total amount of the par value of the shares of the equity capital. The limited liability company is a closed company and its shares are not the object of public circulation. The company is a legal person.
  2. A 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 person.
  3. A limited partnership is a partnership whose purpose is conducting the commercial activities using joint firm and where two or more persons are united basing on the company agreement, if the liability of at least one of the members (limited partners) regarding the creditors of the company is limited by the amount of his/her/its contributions but the liability of the remaining personally liable members (complementaries) of the company is not limited.
    Only a natural or legal person may be the member of the limited partnership. The partnership may not be the member of the limited partnership.
  4. An individual merchant is a natural person- who conducts economic activities and who as an individual merchant is recorded in the Commercial Register. The individual merchant is responsible for his/her liabilities with all his/her property.  
    The natural person who conducts economic activities is obliged  to introduce him/herself for recording as an individual merchant in the Commercial Register if the annual turnover of the conducted economic activities exceeds 200 000 LVL or his/her activities comply with two following elements:
    •    the annual turnover of these activities exceeds 20 000 LVL.
    •    he/she simultaneously employs more than five employees for conducting his/her economic activities.
  5. The general partnership is a partnership whose purpose is conducting the commercial activities using joint firm and where two or more persons (members) are united basing on the company agreement, without limiting their liability against creditors.
    Only a natural or legal person may be the member of the limited partnership. The partnership may not be the member of the limited partnership.

LV - Responsible authority

LV - Responsible authority

The authority responsible for registration is the Register of Enterprises.

LV - Process flow

LV - Process flow

To register a merchant the following steps need to be considered (short overview):

  1. The form of a merchant should be selected: a limited liability company, a stock company, a limited partnership, an individual merchant, a general partnership.
  2. The decision regarding the foundation should be drawn up.
  3. The payment of the equity capital should be carried out.
  4. The documents should be submitted at the Register of Enterprises.
  5. The bank account should be opened.
  6. The company should be registered in the State Revenue Service.

The process of registration depends on the form chosen. The detailled description are available at the website of the Register of Enterprises.

 

How to register a merchant as limited liability company (example):

1. Decision regarding the foundation

2. Payment of the equity capital

The minimal amount of the equity capital of the limited liability company is 2000 LVL. At least 50% of the equity capital of the limited liability company shall be paid till the submission of the registration application to the Register of Enterprises; the remaining share shall be paid within one year from the day when the company was recorded in the Commercial Register. All the equity capital may be fully paid till the submission of the registration application of the company to the Register of Enterprises. The equity capital may be paid in money or by property contributions.

3. Registration in the Register of Enterprises

Application and the attached documents have to be submitted to the corresponding regional department of the Register of Enterprises in accordance with the legal address of the merchant. Application may be submitted by founders or any other person authorized by the founders to do so. Application and the attached documents may be sent by mail as well.

Signature affixed to the application shall be certified by sworn notary. If there is one founder of the capital company, the signature on the application may be certified in the Register of Enterprises (requisites). Also the legal capacity of these persons shall be attested. The application may be signed by other persons on behalf of the founders basing on the specific notarized warrant.

When submitting documents for registration to the Register of Enterprises they have to be listed in the application specifying the number of copies and page count. In compliance with Paragraph 6 and 7 of the Cabinet Regulations No. 154 of the 23 April 1996, the document may not be written by pencil or in other unstable type that is technically easy to correct. Documents that have several pages have to be sewn. The document may not be erased, corrected, with non-stipulated co