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Text consolidated by Valsts valodas centrs (State
Language Centre) with amending laws of:
14 January 2010 [shall come
into force on 24 February 2010];
16 March 2017 [shall come into force on 1 May
2017];
6 July 2021 [shall come into force on 1 August 2021].
If a whole or part of a section has been amended, the
date of the amending law appears in square brackets at
the end of the section. If a whole section, paragraph or
clause has been deleted, the date of the deletion appears
in square brackets beside the deleted section, paragraph
or clause.
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The Saeima1 has adopted and
the President has proclaimed the following law:
On European Companies
Chapter I
General Provisions
Section 1. Purpose of the Law
The purpose of the Law is to regulate the procedures for the
formation of European companies and provisions for their
operation, if a European company is intended to be registered in
Latvia or a company registered in Latvia is directly
participating in the formation of a European company (hereinafter
- the founder company), or a subsidiary company (a company that
is under the decisive influence of the dominating company) of the
founder company is registered in Latvia.
[14 January 2010]
Section 2. Laws and Regulations
Applicable to a European Company
(1) Laws and regulations applicable to the keeping of public
limited-liability companies and a commercial register shall be
applied to a European company, insofar as it is not otherwise
provided for in Council Regulation (EC) No 2157/2001 of 8 October
2001 on the Statute for a European company (SE) (hereinafter -
Regulation No 2157/2001) and this Law.
(2) Involvement of employees in decision making of a European
company shall be regulated by the law On the Involvement of
Employees in Decision Making in a European Commercial Company, a
European Cooperative Society and in the Case of Cross-Border
Merger of Capital Companies.
[14 January 2010]
Chapter II
Formation of a European Company
Section 3. Ways of Forming a
European Company
(1) In compliance with the provisions of Regulation No
2157/2001, a European company may be formed:
1) by merging public limited-liability companies of Member
States;
2) by public limited-liability companies or limited liability
companies of a Member State promoting the formation of a holding
company;
3) by transforming a public limited-liability company of a
Member State;
4) as a subsidiary public limited-liability company within the
meaning of Article 2(3) of Regulation No 2157/2001.
(2) Within the meaning of this Law, a Member State is a
European Union Member State, the Republic of Iceland, the Kingdom
of Norway and the Principality of Liechtenstein.
Section 4. Submission of Information
and Announcement as a Founder Company
(1) If a European company is formed by merger of public
limited-liability companies of Member States, in the case
referred to in Articles 20 and 21 of Regulation No 2157/2001 the
founder public limited-liability company shall submit to the
Enterprise Register a draft terms of merger and the information
referred to in Article 21 of Regulation No 2157/2001. The
registration date of the draft terms of merger and the number of
the commercial register file in which the draft terms of merger
are located, and also the information referred to in Article 21
of Regulation No 2157/2001 shall be announced in the official
gazette Latvijas Vēstnesis.
(2) In order to enable the Enterprise Register to verify the
legality of merger acts of public limited-liability companies and
formalities in accordance with Article 25(1) of Regulation No
2157/2001, the founder public limited-liability company shall
submit a notice to the Enterprise Register regarding completion
of such actions and formalities which are to be performed before
merger, and also the documents to be submitted to the Enterprise
Register in accordance with the provisions of the Commercial Law
in case of a merger of public limited-liability companies.
(3) If, in the merger of public limited-liability companies of
Member States, at least one founder public limited-liability
company has been formed in Latvia and a European company is being
formed in Latvia, the founder public limited-liability companies
shall submit to the Enterprise Register an application for merger
and an application for the registration of the European company.
The application for merger and registration shall be submitted in
order for the relevant entries to be made in the commercial
register in accordance with Articles 12 and 28 of Regulation No
2157/2001 as well as the laws and regulations governing
commercial activity. If, in the merging of public
limited-liability companies of Member States, the European
company is formed in another Member State, after the registration
of the European company, the founder public limited-liability
company whose registered office is in Latvia shall immediately
submit to the Enterprise Register an application for the
exclusion thereof from the commercial register and a
certification of the registration of the European company in
another Member State. The application for exclusion from the
commercial register shall be submitted in order for the relevant
entry to be made in the commercial register in accordance with
Article 28 of Regulation No 2157/2001 and the laws and
regulations governing commercial activity.
(4) If the European company is formed as a holding company,
the founder public limited-liability company or a public limited
liability company shall submit to the Enterprise Register the
draft terms for the formation of a holding company referred to in
Article 32(3) of Regulation No 2157/2001 which the Enterprise
Register publishes on its website. The registration date of the
draft terms for the formation of a holding company and the number
of the commercial register file in which the draft terms for the
formation of the holding company are located shall be announced
in the official gazette Latvijas Vēstnesis.
(5) In the case referred to in Article 33(3) of Regulation No
2157/2001, a founder public limited-liability company or a public
limited liability company shall submit to the Enterprise Register
a certification on the fulfilment of the conditions referred to
in Article 33(2) of Regulation No 2157/2001. The fact of the
fulfilment of the conditions shall be announced in the official
gazette Latvijas Vēstnesis.
(6) Upon conversion of a public limited-liability company of a
Member State into a European company, the founder public
limited-liability company shall submit to the Enterprise Register
the draft terms of conversion referred to in Article 37(5) of
Regulation No 2157/2001 which the Enterprise Register shall
publish on its website. The registration date of the draft terms
of conversion and the number of the commercial register file in
which the draft terms of conversion are located shall be
announced in the official gazette Latvijas Vēstnesis.
(7) The founder company shall pay a State fee for the
submission of information and the making of an entry in the
commercial register, which has been determined in the laws and
regulations regarding the submission of information and the
making of entries in the commercial register.
[16 March 2017; 6 July 2021 / The new wording of the second
sentence of Paragraph four and second sentence of Paragraph six,
and also the amendment to Paragraph five regarding the
replacement of the words "announced in the official gazette
Latvijas Vēstnesis" with the words "published on the website of
the Enterprise Register" shall come into force on 1 July 2023 and
shall be included in the wording of the Law as of 1 July 2023.
See Transitional Provisions]
Section 5. Submission of Information
to the Enterprise Register and the Making of Entries in the
Commercial Register Regarding a European Company
(1) An entry in the commercial register regarding European
companies shall be made on the basis of an application of an
interested party or a court ruling. Information on the European
company in conformity with the laws and regulations regarding the
public limited-liability company and the keeping of commercial
register shall be indicated in the application for making an
entry in the commercial register, insofar as it is not otherwise
provided for in Regulation No 2157/2001 and this Law.
(11) The type of forming the European company in
compliance with the conditions specified in Regulation No
2157/2001 and the sector of activity shall be indicated in the
application for the registration of the European company in the
commercial register.
(2) When submitting an application for the registration of a
European company (also when transferring the registered office of
a European company from another Member State to Latvia), an
application shall be appended by the documents specified in
Regulation No 2157/2001, and also the documents which in the case
of formation of public limited-liability companies are to be
submitted to the Enterprise Register in accordance with the
provisions of the Commercial Law. The Enterprise Register shall
take the decision to register the European company (also when
transferring the registered office of the European company from
another Member State to Latvia) within the time periods
determined in the Administrative Procedure Law.
(3) When transferring the registered office of a European
company to another Member State, the European company shall
submit to the Enterprise Register the address transfer proposal
referred to in Article 8(2) of Regulation No 2157/2001. The
Enterprise Register shall make an entry in the commercial
register on the fact of the proposal to change the registered
office to another Member State and the new registered office, and
shall publish the new registered office on its website. The
registration date of the address transfer proposal, the number of
the commercial register file of the European company in which the
address transfer proposal is located, and the new registered
office shall be announced in the official gazette Latvijas
Vēstnesis.
(4) A European company shall pay a State fee for the
submission of information and the making of an entry in the
commercial register, which has been determined in the relevant
laws and regulations regarding the submission of information and
the making of entries in the commercial register on public
limited-liability companies.
[16 March 2017; 6 July 2021 / The new wording of the third
sentence of Paragraph three shall come into force on 1 July 2023
and shall be included in the wording of the Law as of 1 July
2023. See Transitional Provisions]
Section 6. Registered Office of a
European Company
In accordance with Article 7 of Regulation No 2157/2001, the
registered office of a European company shall be the address of
the head office of the European company (the address of the
location of the management of the European company).
Section 7. Protection of the Rights
of Minority Shareholders
In accordance with Article 24(2) of Regulation No 2157/2001, a
shareholder of a public limited-liability company involved in a
merger who objects to the merger is entitled, within a period of
one month after a decision of a general meeting regarding the
merger has been taken, to request a compensation from the public
limited-liability company, which is provided for in the laws and
regulations governing commercial activity in the case of
reorganisation of companies.
Section 8. Competence of State
Administration Institutions in the Formation of a European
Company
(1) In accordance with Article 19 of Regulation No 2157/2001,
the Financial and Capital Market Commission and the State Revenue
Service may, in compliance with the competence thereof, oppose to
the participation of a public limited-liability company
registered in Latvia in the formation of a European company which
includes a merger.
(2) Decisions of the Financial and Capital Market Commission
and the State Revenue Service may be appealed to a court in
accordance with the procedures specified in the laws and
regulations governing administrative proceedings.
Chapter III
Transfer of the Registered Office of a European Company to
Another Member State
Section 9. Protection of the Rights
of Minority Shareholders
In accordance with Article 8(5) of Regulation No 2157/2001, a
shareholder of a European company who objects to the transfer of
the registered office of the European company to another Member
State is entitled, within a period of one month after a decision
of a general meeting regarding the transfer of the registered
office has been taken, to request a compensation from the
European company, which is provided for in the laws and
regulations governing commercial activity in the case of
reorganisation of companies.
Section 10. Measures for the
Protection of Creditors
If a European company transfers the registered office to
another Member State after a decision of a general meeting of the
European company regarding the transfer of the registered office
has been taken, the laws and regulations that determine the
measures for the protection of creditors with regard to the
company being acquired shall be applied.
Section 11. Competence of State
Administration Institutions in the Case of Transferring the
Registered Office
(1) In accordance with Article 8(14) of Regulation No
2157/2001, transfer of the registered office to another Member
State shall not enter into effect if the Financial and Capital
Market Commission and the State Revenue Service opposes to
it.
(2) Decisions of the Financial and Capital Market Commission
and the State Revenue Service may be appealed to a court in
accordance with the procedures specified in the laws and
regulations governing administrative proceedings.
Chapter IV
Administrative System of a European Company
Section 12. Two-tier Administrative
System of a European Company
(1) If a management organ and a supervisory organ (two-tier
administrative system) exist in a European company, the laws and
regulations applicable to a meeting of shareholders, the
supervisory board and executive board of a public
limited-liability company shall be applied accordingly to the
general meeting of the shareholders, the supervisory organ
(hereinafter - the supervisory board) and the management organ
(hereinafter - the executive board) of the European company,
unless it is otherwise provided for in Regulation No 2157/2001
and in this Law.
(2) In accordance with Article 39(4) and Article 40(3) of
Regulation No 2157/2001, the norms of laws and regulations
governing commercial activity regarding the minimum and maximum
number of members of the supervisory board and executive board of
a public limited-liability company shall be applied accordingly
to the minimum and maximum number of members of the supervisory
board and executive board of a European company.
Section 13. One-tier Administrative
System of a European Company
(1) If a European company has only the executive board
(one-tier administrative system), the laws and regulations
applicable to a meeting of shareholders and the executive of a
public limited-liability company shall be applied accordingly to
the general meeting of the shareholders and the executive board
of the European company, unless it is otherwise provided for in
Regulation No 2157/2001 and this Law.
(2) In accordance with Article 43(2) of Regulation No
2157/2001, the minimum number of members of the executive board
shall be three.
(3) The executive board shall be appointed and removed by a
general meeting of shareholders in accordance with the procedures
for taking the decisions specified in Regulation No
2157/2001.
Chapter V
Share Capital and Annual Accounts of a European Company
Section 14. Expression of Share
Capital
In accordance with Article 67(1) of Regulation No 2157/2001,
the share capital of a European company shall also be expressed
in the monetary units of the Republic of Latvia.
Section 15. Annual Accounts
In accordance with Article 67(2) of Regulation No 2157/2001,
the monetary unit of the Republic of Latvia shall be used as the
monetary unit in the annual accounts and the consolidated annual
accounts of a European company.
Chapter VI
Provisions for the Involvement of Employees
[14 January 2010]
Section 16. Duty of Conducting
Negotiations
[14 January 2010]
Section 17. Establishment of a
Special Negotiating Body
[14 January 2010]
Section 18. Additional
Representatives
[14 January 2010]
Section 19. Election of the Members
of the Special Negotiating Body in Latvia
[14 January 2010]
Section 20. Agreement regarding the
Involvement of Employees in the Taking of Decisions
[14 January 2010]
Section 21. Decision-Making in the
Special Negotiating Body
[14 January 2010]
Section 22. Reduction of
Participation Rights
[14 January 2010]
Section 23. Invitation of
Experts
[14 January 2010]
Section 24. Decision regarding the
Application of the Regulations of a Member State
[14 January 2010]
Section 25. Reconvening of the
Special Negotiating Body
[14 January 2010]
Section 26. Expenditures
[14 January 2010]
Section 27. Content of the
Agreement
[14 January 2010]
Section 28. Duration of
Negotiations
[14 January 2010]
Section 29. Application of Basic
Provisions regarding Employee Involvement in the Taking of
Decisions
[14 January 2010]
Section 30. Determination of Forms
of Participation
[14 January 2010]
Section 31. Establishment of a
Representative Body
[14 January 2010]
Section 32. Basic Provisions
regarding the Information and Consultation of Employees
[14 January 2010]
Section 33. Standard Rules for
Employee Participation
[14 January 2010]
Section 34. Commercial Secrets
[14 January 2010]
Section 35. Rights and Duties of
Members of a Special Negotiating Body, Members of a
Representative body and Employee Representatives
[14 January 2010]
Section 36. Liability for
Non-compliance with this Law
[14 January 2010]
Transitional Provision
The new wording of the second sentence of Section 4, Paragraph
four and second sentence of Section 4, Paragraph six of this Law,
and the third sentence of Section 5, Paragraph three of this Law,
and also the amendment to Section 4, Paragraph five of this Law
shall come into force on 1 July 2023.
[6 July 2021 / The abovementioned amendments shall
be included in the wording of the Law as of 1 July 2023]
Informative Reference to European
Union Directive
[26 July 2021]
The Law includes legal norms arising from Directive (EU)
2019/1151 of the European Parliament and of the Council of 20
June 2019 amending Directive (EU) 2017/1132 as regards the use of
digital tools and processes in company law.
The Law has been adopted by the Saeima on 10 March
2005.
President V. Vīķe-Freiberga
Rīga, 24 March 2005
1 The Parliament of the Republic of
Latvia
Translation © 2022 Valsts valodas centrs (State
Language Centre)
