Latvian joint stock company incorporation
Joint stock company, commonly abbreviated as JSC, is a public legal entity, which means that its shares can be publicly traded. Similarly as limited liability company, also JSC shareholders liability is limited by the contributed capital.
The minimum amount of capital for JSC is 35,000 EUR and this sum has to be paid in fully by the registration of the company. In case of specific legal entities, such as insurance companies, banks and other non-banking financial institutions, the minimum share capital amount can be much larger.
Shareholders of the company
Similarly as for a limited liability company, the owners of company shares may be either legal entities or individuals. But contrary to a limited liability company, JSC shares can be bought and sold publicly. The maximum number of shares is unlimited and more shares can be issued during the life of the company. There are several types of shares and usually the shareholders’ rights to vote and receive dividends depend on the category of shares. Typically shareholders are entitled to express their opinion about the direction of the business and other subjects, such as the distribution of profit and appointment of the council. All shareholders’ decisions are made during a shareholders’ meeting.
A council elects as well as revokes members of the board of directors. Board of directors is the executive body of the company. Unless stated otherwise, all members of the board of directors represent the company jointly and decisions are made by voting. Only a private person can be a member of the board of directors.
Documents needed for JSC incorporation in Latvia
In order to register a company in Latvia, below documents need to be submitted in the Register of Enterprises of the Republic of Latvia:
- Company incorporation application form;
- Agreement (or a decision in case of a sole shareholder) to establish a company;
- Articles of association of the company;
- Bank’s reference confirming the share capital payment;
- Founder registry schedule of the company;
- Confirmation by the council of the company;
- Confirmations by the board members of the company;
- Resolution about the company’s legal address signed by a board member;
- Resolution about the allowance to register the company in the particular address (signed by the real estate’s owner);
- Proof of payment of the state taxes for a company formation;
- Proof of payment for a publication in the official newspaper “Latvijas Vestnesis”
JSC incorporation process in Latvia
Incorporation of a JSC in Latvia is a complex legal procedure, which requires involvement of experienced corporate lawyers or incorporation agents. JSC incorporation generally consists of the following steps:
- Collection of all necessary information and documents for the incorporation of a company;
- Preparation of the foundation documents for the incorporation of a company;
- Signing of the foundation documents (at the notary);
- Opening of a temporary bank account where the share capital is paid;
- Payment of state fees for the company formation and the publication in the official newspaper;
- Submission of the foundation documents to the Register of Enterprises of the Republic of Latvia;
When the company is registered, you shall receive following documents:
- Certificate of registration;
- Articles of association;
- Decision of the state notary of the Register of Enterprises of the Republic of Latvia
Reporting to tax office
JSC is obliged to report its financial statements once a year and a report on the company’s employee salaries must be submitted each month. In case the company’s turnover exceeds 50,000 EUR, it is obliged to register as a VAT payer. This also needs to be done if the company plans to export goods or services abroad. If a company is registered as a VAT payer, it has to submit VAT reports on a monthly basis.