Types of Latvian Companies

Latvian law permits developing business on its territory on the same grounds, and following the same rules for Latvian merchants as well as for foreigners. The basics of the types of business entities, adopted by the Saeima (The Latvian Government) and written in The Commercial Law, are enlisted below.

a) Latvian Individual Merchants (individu?lais komersants)

An individual merchant or sole proprietor is a natural person, registered as a merchant with the Commercial Register. The sole proprietor has the duty to register, if the yearly turnover from economic activities exceeds 200.000 lati (Latvian currency), or if the economic turnover exceeds 20.000 lati, and the entrepreneur has more than five employees. An individual merchant is liable for his obligations with his whole property.

b) Latvian General Partnership (pilnsabiedr?ba)

A general partnership is founded by two or more partners who operate under a joint business name. A natural person, or a legal person may be a partner in a general partnership. All partners are liable for the obligations of their partnership, to the extent of all their assets. The partnership operates by using an agreement concluded by the partners, which can be changed only with the consent of the general partners. All the partners have duties, regarding payments and rights to interfere in the process of management. This kind of partnership can be entered in the Commercial Register, by submitting a request signed by all the general partners.

c) Latvian Limited Partnership (komand?tsabiedr?ba)

It is founded by two ore more natural or legal persons, who operate under a common business name. This partnership has at least one of the persons, the general partner, liable for the obligations and duties of the company with all his propriety, and at least one of the persons liable to the extent of his contribution. This is the limited partner. The partnership functions on the base of an agreement, which enlists the responsibilities, obligations, rights and contributions of the members.

d) Latvian Limited Liability Company (sabiedr?ba ar ierobežotu atbild?bu)

The most common form of business presence in Latvia is a limited liability company. It represents a private company, the shares of which are not publicly tradable objects. The minimum required share capital, to establish a limited liability company is 2.000 lati which has to be paid before registration with the Commercial Register. The shareholders liability is limited to the amounts of the capital invested. 

e) Latvian Joint Stock Company  (akciju sabiedr?ba)

The Joint Stock Company is a popular vehicle for larger companies looking to raise public capital. A minimum share capital of 25.000 lati is required, and must be fully paid up before registration. A Joint Stock Company is a public company, the stocks of which may be publicly tradable objects. Joint stock companies are entitled to issue employees' shares, which should be covered by the profit of the company. The total value of issued employees' shares may not exceed 10% of a company's subscribed share capital. The employees' shares are not transferable and cannot be inherited.