COMPANY FORMATION

INCORPORATION OF A
LIMITED LIABILITY COMPANY
IN THE COMMERCIAL REGISTER

A LIMITED LIABILITY COMPANY
is a commercial company, the equity capital of which consists of the total sum of the par value of equity capital shares. The Limited Liability Company is a private company, the shares of which are not publicly tradable objects. The Company is a legal person.

Applying to register a Limited Liability Company in the Commercial register it is required to submit an application to the Register of Enterprises of the Republic of Latvia.

An application shall be signed by all founders of the company. Signatures affixed to the application shall be certified by sworn notary. Legal capacity of these persons shall be notarized similarly. Subject to a special Power of Attorney certified in due notarization order, any other person may sign an application instead of the founder.

An application may be submitted by founders or any other person authorized by the founders thereto.

DOCUMENTS ATTACHED TO THE APPLICATION
1. Memorandum of Association, where it is required to specify:
1) Information regarding the founders (for a natural person – given name, surname, personal identity number and the residential address, and for a legal person – firm name, Certificate of Incorporation, registered office, given name, surname, personal identity number, occupation and the residential address of the person signing the Memorandum of Association for and on behalf of a legal person);

firm name of the company;
amount of the Equity Capital of the company, the number and par value of shares;
amount of the Equity Capital each founder has subscribed to and the amount of equity capital to be paid-up before registration, the procedures and time periods for payment
the number of shares due to each founder according to the part of the equity capital the founder has subscribed to;
the number of and the par value of those shares which, when founding the company are to be paid-up with material contributions, specifying each item of property contribution and given name, surname, personal identity number and the residential address of each person assuming the obligations to make property contribution;
the allowed amount of founding costs and the procedures of covering;
any special duties, rights or advantages which are granted during the period of the founding of the company to a person who has taken part in the founding of the company;
given names, surnames, personal identity numbers and the residential address of the members of the Board of Directors and the Managing Director of the company (if the executive body is represented by the sole member);
given names, surnames, personal identity numbers and the residential address of the members of the Supervisory Board (if the company has only the Supervisory Board); given name, surname, personal identity number and the residential address of auditor;
other provisions deemed by the founders significant and not contravening the law;
place and date of making (signing).

The Memorandum of Association shall be signed by all founders. Their signatures shall be publicly certified by sworn notary or in the rural district court.

If a company is established by one founder, he makes and signs a resolution of the company foundation instead of the Memorandum of Association comprising all information specified above. The signature of the founder to the resolution of the company foundation shall be publicly certified by sworn notary or in the rural district court.

2. The Articles of Association made in 2-3 original copies, where it is required to specify:
firm name of the company;
spheres of commercial activities – in accordance with the Common classification of the spheres of business activities (NACE).
term and purpose of activities of the company (if a company is established for a definite period of time and for attaining a certain goal);
the amount of the Equity Capital, the number and par value of shares;
number of members of the executive bodies of the company. If there are two or more members in the executive body, the Articles of Association should state, that the Board of Directors is the executive body of the company, as well as define the rights of the members of the Board of Directors to represent jointly or separately the company. If only one member represents the executive body, the Articles of Association should determine that Managing Director of the company represents the executive body of the company;
number of members of the Supervisory Board of the company (if the Supervisory Board is envisaged in the company);
the specific terms of share alienation (if any);
other provisions deemed by the founders significant and not contravening the law;
date of signing the Articles of Association.

The Articles of Association shall be signed by all founders. The founders’ signatures to the Articles of Association shall be publicly certified by sworn notary or rural district court.

3. A notice from a bank regarding the payment the equity capital (if the equity capital or part of it is paid-up in money).
Minimum amount of the Equity Capital of a limited liability company is LVL 2000. To apply for entry in the Register of Enterprises you have to pay at least 50% of the equity capital of the limited liability company, the remaining amount is payable within one year from the moment of entry in the Commercial register. It is possible to pay up the Equity Capital in full Equity Capital may be paid in money and property contribution.

4. Document which certifies the value of each property contribution (if property contributions are made). A report to be made and submitted of each property contribution, specifying the following:
description of each item of contribution;
ownership of the item;
method utilized for each contribution valuation (it is no need to specify it, if the valuation was carried out by the founders);
report of conformity of the item of property contribution with commercial activities of the company.
The report shall be made and signed:
by the expert included in the least approved by the Register of Enterprises or
founders (if the total value of property contribution does not exceed LVL 4000, and the property contribution together are less than a half of the Equity Capital equity capital of the company).

5.Written consent given by each member of the Supervisory Board to join the membership of the Supervisory Board (if a company established the Supervisory Board).

6.Written consent given by each member of the Board of Directors to join the membership of the Board of Directors or consent of the Managing Director to act as Managing Director, if there is only one member representing the executive body of the company.

7. Notarized specimen of signatures of the members of the Board of Directors or Managing Director, if there is only one member representing the executive body of the company.

8. Notice of the Board of Directors or Managing Director, if there is only one member representing the executive body of the company, of the registered office of the company.

9. Receipt conforming the state fee payment.
The state fee is payable prior to an application submission and it can be done in any banking institution in LATVIA.

10. Receipt confirming the payment for the announcement in the official newspaper «Latvijas Vēstnesis».

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