Winding up a business in Latvia is governed by the Commercial Law and the Insolvency Law.
Types of winding-up
Legislation of the Republic of Latvia provides for voluntary winding-up and winding-up by order of the court.
When the company itself decides to cease its activities, a voluntary winding-up commences.
Winding-up by order of the court
A company's activities may cease by order of the court:
- where the company’s founding documents are in breach of the law;
- the company’s equity capital does not meet the statutory requirements;
- where the company has not provided an office of the Commercial Registry with the information or documents required by law;
- where the shareholders have not passed a resolution to wind up the company when they were required to do so according to legislation or the company’s Articles;
- where the board has not held the representation rights for more than three months;
- on the occurrence of other events prescribed by law.
An application to the court may be made by the executive board, the supervisory board, a member of the board, a shareholder, an office of the Commercial Registrer and other persons prescribed by law.
A decision on an enforced winding-up is made by an office of the Commercial Registrer - the Enterprise Register. The procedures for an enforced winding-up are prescribed by legislation.
When filing for bankruptcy is the only option left for a business owner, it pays to cut losses, initiate proceedings sooner rather than later, and move on to a new business project.
Striking-off from the Enterprise Register
If you have decide to wind up the company, you must give notice to the Enterprise Register within 3 days of that decision. The winding-up shall be carried out by the members of the executive board, if the company’s Articles do not provide otherwise or if the shareholders or the court have not appointed a receiver. You need to inform the Enterprise Register of the receivers' identity.
Striking-off from the register of taxpayers
As a taxpayer, whether you are an individual or a legal entity (the company) you must give notice to the tax authority of your intention to wind up the business within 10 days of the decision.