How To Close A Company In Latvia

A Latvian company may be voluntarily struck off the register provided that the company has no assets or liabilities, in other words, the company is dormant or the balance sheet is zero. This is the easiest and quickest way to close a Latvian company.

In order to ensure that the Latvian company is closed in the proper manner and in the quickest possible timeframe you will need to follow the steps below:

• • The shareholders sign a resolution to initiate the liquidation process and assign the liquidator.
  • The liquidator can be any physical person(resident or non-resident of Latvia), board member or any other representative of the company.
  • The main aim of liquidation is to pay off all the company's debts. The company therefore enters into a Debtor/Creditor period which lasts about 3-4 months.
  • The company's debts in this case can be covered only form the company's assets. The remaining assets are divided by the shareholders. The audit might have to be underwritten by the State Revenue Service in order to approve the liquidation.
  • The liquidation final balance is submitted and it should be 0.
  • The company is struck from the register once the State Revenue Service confirms in writing that there are no debts remaining on the budget.
  • The whole process takes up to 1 year or more. During the liquidation process the company should retain its legal address and continue submitting monthly reports to the government.

ADVANTAGES OF VOLUNTARY DISSOLUTION

• • It is a clean removal of a dormant or zero liability company from the Companies House Register.
  • Dissolution is less costly than liquidation in terms of fees and expenses.

DISADVANTAGES OF VOLUNTARY DISSOLUTION

• • Not a quick solution but the only way to close the company cleanly
  • Costly

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If the company starts the liquidation process and is unable to pay debtors then the company must file for bankruptcy. This is an expensive course of action and clear advice needs to be taken.

What happens if you are looking at filing for bankruptcy?

• • The directors/shareholders file a bankruptcy petition to the court and the court then confirms the filing
  • The process is initiated and usually takes 1-2 months for the court to make the decision to begin the process
  • The court then assigns a liquidator who takes control of the company .i.e. at this point the directors no longer fulfil their functions.
  • From now on, the Administrator is responsible for debtors' claims, companies assets and if he/she discovers that there are not enough funds to cover debts – certain debts such as unpaid salaries, will be paid out from the government fund.
  • After the bankruptcy process is over after a period of 3 years or more – the company is struck off from the Company Register.

For both options it is important to take care to protect the assets of the business, to conform to the liquidator's wishes and to act responsibly. Please contact us for further information and advice as to how to proceed.