Company formation and accounting in Latvia
Last updated: 2012-07-10
The duty to disclose information is an obligation, stated in the Commercial law, to disclose information about the actual owners of a capital company (LLC and JSC) and the actual members of a partnership.

The owner (holder) of shares (stocks) is obliged to report that he / she owns (holds) shares (stocks) in favor of another person if, the owner owns (holds) at least 25% of shares (stocks). In the report must specify the person in favor of which the registered owner owns (holds) the shares (stocks).

If the owner (holder) of the shares is not a natural person and is not incorporated under laws of the country - member of the European Union then such owner also must inform about founders and members of the entity.

The above mentioned duty must fulfill within 14 days from moment when a holder of shares acquired the shares. To inform about actual beneficiaries, need to prepare a document with data about the beneficiaries, so that the data allow that person to be identified unambiguously. To the information must add documentary evidence about actual beneficiaries.

If holder of shares for objective reasons can not identify a person that is actual owner of a company, then the holder in the statement (notice) writes the reasons why he can not inform about actual beneficiaries.

Capital company and a partnership the received information during 14 days reports to the institution of the commercial register.

The law enforcement authorities and tax authority have rights to get information about actual beneficiaries of limited liability company, joint stock company and partnership. The above mentioned information is not publicly available.

The above mentioned amendments to the Commercial law came into force on 13 July 2011. Aim of the amendments is to provide possibility for governmental authorities to know actual beneficiaries of Latvian companies in case if registered owner of Latvian company is so called offshore company.

Need to note that the amendments have not reached their aim. During 2 years only ~ 250 companies (from ~700) submitted information about actual beneficiaries.

In legislation there is no penalty for nominal shareholders if they do not provide information about actual beneficiaries to a board of directors (management) of a company. As a result a management of a company and the Register of Enterprises have no information about actual beneficiaries. For management of a company penalty and punishment is prescribed only if management of a company received information about actual beneficiaries and not submitted the information to the Register of Enterprises.

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