Text consolidated by Valsts valodas centrs (State Language Centre) with amending laws of

Section 339. Reorganisation Prospectus

(1) Each of the companies involved in the reorganisation process shall prepare in writing a reorganisation prospectus (hereinafter – prospectus), in which the following is indicated and explained:

1) the provisions of the draft agreement;

2) the legal and economic aspects of the reorganisation;

3) the capital shares (stocks) exchange coefficient and the amount of premium (if such is provided for);

4) the methods used to determine the capital shares (stocks) exchange coefficient and the amount of premium, as well as problems which arose in the use of these methods.

(2) Companies may prepare a joint prospectus. In such case each of the companies involved in the reorganisation process shall indicate the data referred to in Paragraph one of this Section.

(3) A company need not prepare a prospectus if all shareholders agree thereto. A company to be acquired or divided need not prepare a prospectus, if all capital shares (stocks) of the company to be acquired or divided belong to the acquiring company.

(2) [15 April 2010]

(3) The reorganisation agreement shall not be checked by the auditor, if all shareholders or members agree thereto. The auditor need not examine the draft agreement of the acquired or dividing company if all the capital shares (stocks) of the acquired or dividing company are owned by the acquiring company.

(4) The companies which are involved in a reorganisation process shall ensure that the auditor has access to all the documents and information which have significance for performing the duties of an auditor.

Section 341. Opinion of the Auditor

(1) The auditor shall draft a written opinion regarding the results of the examination of the draft agreement and shall submit it to the company. If one auditor is elected for all the companies, he or she shall submit the opinion to all the companies.

(2) The following shall be indicated in the opinion:

1) whether all the necessary documents were submitted to the auditor;

2) whether the capital shares (stocks) exchange coefficient and the amount of premium are fair and justified;

3) whether the reorganisation may cause losses to the creditors of the company;

4) whether the methods which were used to determine the capital shares (stocks) exchange coefficient and the amount of premium are adequate;

5) special problems which have arisen in the application of the valuation methods used.

Section 342. Liability of the Auditor

The auditor shall be liable for losses incurred through his or her fault while conducting the examination.

Section 343. Decision on Reorganisation

(1) A meeting of shareholders of each of the companies involved in the reorganisation process shall examine the draft agreement and take a decision on reorganisation, and the meeting shall take place not earlier than a month after information regarding the draft agreement has been notified in accordance with Section 338, Paragraph five of this Law.

(2) If amendments in relation to the reorganisation need to be made in the articles of association of a capital company or in a partnership agreement, a decision on such amendments shall be taken concurrently with the decision on reorganisation.

(3) For not less than one month before the day of the meeting of shareholders regarding approval of the agreement is to be held, all shareholders shall be given an opportunity to become acquainted to the following documents at the legal address of the company:

1) the draft agreement;

2) the prospectus;

3) the opinion of the auditor;

4) the annual accounts of all the companies involved in the reorganisation process for the last three accounting years; and

5) the report about the commercial activities of the company which shall be prepared not earlier than three months before the reorganisation notice is submitted to the Commercial Register Office if the previous annual accounts were completed more than six months before the submission of the notice.

(4) The report on the commercial activities of the company referred to in Paragraph three, Clause 5 of this Section shall be prepared in accordance with the requirements of law regarding the preparation of annual accounts.

(4¹) The company need not prepare a report on the commercial activities, if all shareholders agree thereto or if the company, in accordance with the provisions of the Financial Instrument Market Law has published an interim report for a time period of six months.

(5) Shareholders have the right to receive copies of or extracts from the documents referred to in Paragraph three of this Section free of charge.

(6) At the meeting of shareholders of a capital company, the board of directors of the company shall, pursuant to a request by the shareholders, submit explanations regarding the draft agreement and prospectus, regarding the legal and economic consequences of the reorganisation, as well as information regarding the other companies involved in the reorganisation process.

(7) The decision on reorganisation shall be compiled in the form of a separate document.

(8) On the basis of a decision on reorganisation the relevant company shall enter into an agreement.

(9) A list of those shareholders (with their signatures), who voted in the meeting of shareholders against the decision on reorganisation shall be appended to the decision on reorganisation.

(2) In the case referred to in Paragraph one of this Section the company shall ensure continuous access to the documents on the Internet home page thereof free-of-charge for not less than a month until the day when a meeting of shareholders regarding approval of an agreement is planned, and not less than one year after the day when a decision was taken in the meeting of shareholders on approval of the reorganisation agreement.

(3) If due to technical or other reasons the company is not able to ensure continuous access to the documents on the Internet home page thereof during the specified period of time, a shareholder has the right to get acquainted with the relevant documents at the legal address of the company.

(4) The company shall not have a duty to ensure the shareholders with a possibility of receiving the copies of the documents specified in Section 343, Paragraph three of this Law free of charge, if the relevant documents may be downloaded and printed out free-of-charge from the Internet home page of the company for not less than a month until the day when a meeting of shareholders regarding approval of an agreement is planned.

(5) The board of directors of the company shall be responsible for the conformity of the documents inserted on the Internet home page of the company with the originals of the documents specified in Section 343, Paragraph three of this Law.

[16 June 2011; 16 January 2014]