According to Commercial law it is allowed to set up Limited Liability Company with reduced capital.
Limited Liability Company with reduced share capital is company which share capital is less than 2800,- eur. Before registering micro-capital company share capital must be prescribed and paid. Share capital of micro-capital LLC can be paid only in cash.
To register company with reduced capital in Latvia, there must be executed following requirements of Commercial law:
– The number of founders of such company may not exceed five natural persons;
– The number of owners may not exceed five natural persons
– The board of directors consist of one or more board members and they all are shareholders of this company;
– Each shareholder can be member only in one limited liability company with reduced share capital in Latvia.
Every year LLC with reduced share capital must create a minimum reserve by deduction of at least 25% from net profit of previous financial year.
This reserve can be used in following ways:
– Increasing share capital of reduced-capital company;
– Covering loss of current annual report if they are not covered with profit from previous annual report;
– Covering loss of previous annual report if they are not covered from profit of current annual report.
Limited Liability Company in Latvia after registration in the register of Enterprises can be registered as Micro-enterprise tax payer in the same way as LLC with fully paid share capital with 2800,- eur.
Legal address of reduced capital Limited Liability Company must be located only in the Republic of Latvia.
Founders and Owners of reduced capital Latvian Limited Liability Company
– To register micro-capital Limited Liability Company in Latvia minimum number of founders is one founder and maximum number is five.
– Founders of micro-capital LLC can be only natural persons.
– Founders can be residents as well as non-residents of Latvia.
The management body of Latvian reduced capital LLC are:
– board of company – Board of directors can consist of one or more natural persons (maximum five) and they can be residents or non-residents of Latvia;
– council of company (it that is made) and
– shareholders meeting
Company is represented by board members of company.
Legal status of reduced capital Limited Liability Company is legal person.
The company is liable to its obligations not more than its own property. Shareholders of Latvian LLC don’t take responsibility for company obligations and reversely – company don’t take any responsibility for shareholders obligations.
Reduced capital company registration in Latvia process
All company formation and registration process consists of following:
– collection of necessary information for company registration;
– preparing foundation documents for company registration;
– signing of foundation documents, also at notary;
– payment of state fees for company formation and for publication official newspaper;
– foundation document submitting to the Register of Enterprises of the Republic of Latvia;
– company registration in the Register of Enterprises of the Republic of Latvia and receiving documents.
Documents to submit in the Register of Enterprises of the Republic of Latvia for reduced capital company formation in Latvia
To register reduced capital company in Latvia one must submit following documents to register of enterprises:
– Application Form for company registration;
– Agreement for establish company or Decision to form a company as sole shareholder;
– Articles of association of company;
– Bank’s reference on payment of share capital or for investment in kind – if necessary;
– Founder registry schedule of company;
– Confirmation to be a council of company (in case if the council is established);
– Confirmation to be board member of company;
– Resolution signed by board member about legal address of company;
– The real estate owner’s resolution of allowance to register the company in his address;
– Proof of payment (receipt) of state taxes for company formation;
– Proof of payment (receipt) for publication in official newspaper “Latvijas Vestnesis”
Necessary information for reduced capital company registration in Latvia
To do company formation in Latvia and to prepare company registration documents we need following information:
– Name for company in Latvia;
– Legal address of company (Legal address for company in Latvia can be only in Latvia. We can provide you with legal address for company. Check section: Business support services);
– Information about founders of company;
– Information about board members of company;
– Information about share capital of company;
– business type of company;
– any other important information you wish to show.
Reports to tax office
VAT registration – If Latvian company plan to export goods, services or turnover of Latvian company during previous 12 month exceeds 50.000,00 EUR, then company is obliged to register as VAT payer in VAT register.
Report on salary – if there are employees in company then report of employee salaries must be submitted every month.
Annual report – company is obliged to submit annual report one time in a year.
Bank account for Latvian company
According to Latvian legislation company registered in Latvia can open bank account in any commercial bank in Latvia or in any other country. If bank account of Latvian company is opened in bank in other country then it must be reported to tax office.
So for your Latvian company you can open bank account in any Latvian commercial bank and manage it via online banking (internet-bank) and use Visa or EC/MC debit or credit card.
In some commercial banks in Latvia – it is possible to open bank account remotely on basis of Power of Attorney (POA).