Company formation and accounting in Latvia
Last updated: 2015-11-24
According to the Article 26 of the Commercial law of Latvia, a firm is a name of a merchant (sole trader, partnership, company), that is recorded in the commercial register.
In narrow meaning a firm is a designation, without reference to the type of merchant (eg, "My Company Name" without company type). But in the name must be specified type of a merchant.

Full name of a sole trader (individual merchant) must include words "Individuālais komersants" or abbreviation "IK".
A name of a general partnership must include words "Pilnsabiedrība" or "PS".
A name of a limited partnership must include words "Komandītsabiedrība" or "KS".
A name of a limited liability company must include words "Sabiedrība ar ierobežotu atbildību" or the "SIA".
A name of a joint stock company must include words "Akciju sabiedrība" or "AS".

The above mentioned type of a merchant you can place at the beginning (like, SIA MyCompanyName) or at the end (like, MyCompanyName SIA) of a firm.
Type of a merchant / abbreviation of a merchant must be translated to Latvian.
Merchant uses a firm in business activities and indicates in documents.

Purpose of a firm is individualization of a merchant.

According to the Article 28 of the Commercial Law of Latvia, the firm (name), of a merchant must be clearly and certainly different from firms that are already registered or applied for registration. Signs on which the governmental notary of the Register of enterprises determines that the firm does not differ from the firm, already registered or applied for registration are as follows:
  • The complete coincidence of firms
  • The only difference between the firms are spaces and punctuation between the letters and numbers
  • The only difference between the firms is the use of uppercase and lowercase letters (eg, Firm and FIRM)

But, according to the explanations of the Chief State Notary of the Register of enterprises, there may be cases where the difference of one letter is enough to say that firms are different. The law defines cases in which the notary the Register of enterprises has the right to postpone the registration, but this does not mean that the notary has such a duty.

The company can not include misleading information about the circumstances that are important for commercial activities, especially about type of a merchant or a business, or about the volume of commercial activities.

The firm must not conflict with good morals.

A firm must not contain the words "Republic of Latvia", or translation of these words.

If a firm contains the name of the administrative territory or populated area, then the firm must not coincide with the name of the relevant administrative territory or populated area, with exception - the name of the village.

Firms (names of merchants) may be divided in three groups, depending of content/information included in a firm:
1) Personal firm (for example, in a firm you include your name and surname, - SIA John Smith).
2) Material firm. A firm contains reference on planned activities of a merchant (for example, SIA Legal services).
3) Fantasy (imagination) firm. Something without any well known meaning (for example, SIA DN-NP), or something immaterial (for example, SIA Flow).
In a firm (company name) you can also use combination of the above mentioned groups.

If Latvian merchant opens structural entities (for example, shops, restaurants), the merchant can give each structural entity different name (name of a structural entity can differ from name of a merchant/firm).

A merchant can not sell a firm itself. To sell a firm in certain cases an owner of a merchant can sell the merchant (company) together with a firm.

A firm is not the same as a trade mark. A merchant can name a trade mark in different name (in comparison to a firm). For example the firm SIA CompanyName may name a trade mark by name "GoTopCompany".

Comments, questions

You might be interested in:
More about company formation and taxes in Latvia