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

Section 348. Firm Name of the Acquiring Company

(1) If there is only one acquiring company, it may after reorganisation use the firm name of the acquired company.

(2) The provisions for the continued use of the firm name of a dividing company shall be provided for in the agreement.

(3) The acquiring company may use the firm name of the restructured company, except for indications of the restructured company’s type.

(4) If a natural person has been a shareholder of the acquired, dividing or restructured company and is not a shareholder of the acquiring company, the acquiring company may use the name of such person in the firm name only with the written consent of such person or his or her heirs.

[14 February 2002]
Section 349. Entering of the Reorganisation in the Commercial Register
(1) The entering of the acquired or dividing company in the Commercial Register shall be made only after entries have been made regarding all the acquiring companies.

(2) After making of the record regarding reorganisation in the Commercial Register, the acquired company shall be deleted from the Commercial Register.

(3) After entering of the reorganisation of a dividing company has been made, extracts from the file of the dividing company shall be attached to the files of the acquiring companies, and in cases when the division was by the way of splitting up, the dividing company shall be deleted from the Commercial Register.

(4) In the case of restructuring the entry of the acquiring company may be made in the Commercial Register after entering of the reorganisation of the restructured company has been made.

(5) Entries made in the Commercial Register regarding reorganisation shall be promulgated in accordance with the procedures specified in Section 11 of this Law.

[22 April 2004]
Section 350. Legal Meaning of the Commercial Register Entry of the Reorganisation
(1) Reorganisation shall be considered as being in effect from the time when entries have been made in the Commercial Register regarding all the companies involved in the reorganisation process including newly founded companies.

(2) From the time when a reorganisation comes into effect:

1) the property of the acquired company shall be considered to have been transferred to the ownership of the acquiring company;

2) the property of the dividing company shall be considered to have been transferred to the ownership of the acquiring companies according to the agreement.

(3) From the time when a company is deleted from the Commercial Register, such company shall be considered to be liquidated.

(4) From the time when a reorganisation has come into effect, the shareholders of the acquired, dividing or restructured company shall become shareholders of the acquiring company, and their capital shares (stocks) shall be exchanged for the capital shares (stocks) of the acquiring company in proportion to the capital shares (stocks) owned by them. This provision shall not be applied if the dividing company which is divided by divestiture becomes the sole shareholder of the acquiring company.

(5) The rights of third parties to the capital shares (stocks) of the acquired, dividing or restructured company shall be preserved in relation to the capital shares (stocks) of the acquiring company.

(6) The capital shares (stocks) of the acquired or dividing company, which were owned by the acquiring company or the acquired or dividing company itself, or by a person who acted in his or her own name but for the benefit of the relevant acquired, dividing or acquiring company, shall not be exchanged and shall be extinguished, except for cases when the dividing company as a result of apportionment becomes the sole shareholder of the acquiring company.

(7) A reorganisation after it has come into effect may not be disputed.
Section 351. Liability of Companies Involved in the Reorganisation Process
(1) The acquiring company shall be liable for all the obligations of the acquired or restructured company.

(2) All the companies involved in the division of a company shall be solidarily liable for obligations of the dividing company which have been incurred up to the reorganisation coming into effect. In the mutual relations between such solidarily liable debtors, only that person shall be deemed as the obligated subject whose obligations are provided for in the agreement.

(3) If the obligations of a company involved in a division are not specified in the agreement, it shall be solidarily liable, together with other companies involved in the reorganisation process, for those obligations of the dividing company which shall become due within five years from the time when the reorganisation comes into effect.
Section 352. Liability of Members of the Board of Directors and of the Council
(1) The members of the council and of the board of directors of companies and the shareholders of partnerships, who have representation rights involved in the reorganisation shall be solidarily liable for any losses caused to the company, its shareholders or creditors during the course of the reorganisation through their fault.

(2) The limitation period for any claims arising from Paragraph one shall be five years from the time when reorganisation comes into effect.

(3) If an acquiring company owns all shares (stocks) of the acquired company, the members of the board of directors and of the council of the acquired company shall not be responsible for loss caused during the reorganisation process for a shareholder of the acquired company.

[16 January 2014]

Section 353. Compensation

(1) Shareholders of the acquired, dividing or restructured company, who did not agree to the reorganisation, are entitled, within two months from the time when reorganisation comes into effect, to request the acquiring company to redeem their shares for money (compensation).

(2) Compensation may be requested also by shareholders of a company newly formed established as a result of division, who voted against the approval of the articles of association.

(3) The rights referred to in Paragraphs one and two of this Section shall not apply to those shareholders who are not entered in the list referred to in Section 343, Paragraph nine and in the minutes referred to in Section 355, Paragraph five of this Law.

(4) The amount of compensation shall be equal to the amount which the shareholder would have acquired by dividing the property of the acquired or restructured company in the case of liquidation if it took place at the time when the decision on reorganisation was taken.

(5) The restrictions specified by law regarding the procedures by which a company may acquire its own shares shall not apply with respect to the compensation.

(6) From the time when the reorganisation comes into effect, the acquiring company shall pay the interest set by law on any compensation not paid out in the amount provided for and within the time period.

(7) If shareholders of the acquired or dividing company, who do not agree with the reorganisation, do not request compensation, they may alienate their shares within two months, irrespective of any restrictions provided for in the decision, the articles of association or law.

(2) In founding a new company, the provisions for the founding of the relevant type of company shall be applied, if in this Section it is not specified otherwise.

(3) In addition to the information referred to in Section 338, Paragraph two of this Law, the reorganisation agreement shall indicate the firm name and legal address of the acquiring company. To the agreement shall be appended the founding company’s draft articles of association or, if the acquiring company is a partnership – the partnership agreement which shall be approved by a decision on reorganisation of a meeting of all the shareholders of the acquired company.

(4) The acquired companies shall submit to the Commercial Register Office a joint application regarding entering of the new company in the Commercial Register.

(2) If the company owns the bearer stock, the notification addressed to the shareholders shall be published in the official gazette Latvijas Vēstnesis and at least one more newspaper.

(3) The following shall be indicated in a notification to participants:

1) the firm name, registration number and legal address of the company;

2) the firm names, registration numbers and legal addresses of other companies involved in reorganisation;

3) the type of reorganisation, indicating the acquiring company and the acquired company;

4) the place and time where and when the shareholders may become acquainted with a draft agreement on reorganisation and annual reports of all companies involved in reorganisation regarding the preceding three accounting years;

5) the time period, during which the shareholders of the acquiring company may request that a meeting of shareholders is convened in order to take a decision on reorganisation. Such time period shall be not less than a month from the day of sending the notification – or in case of the bearer stock – from the day of publishing the notification.

(4) If as a result of reorganisation the acquiring company must increase the equity capital thereof, a draft decision on amendments to the articles of association shall be appended to the notification to be sent to the shareholders, specifically indicating the provisions of the articles of association, which are intended to be amended.

[29 November 2012]
Section 354.² Right of the Shareholder of the Acquiring Company to Convene a Meeting of Shareholders
(1) The shareholders of the acquiring company who represent not less than one twentieth part from the equity capital of the company have the right, within the time period indicated in Section 354.¹, Paragraph three, Clause 5 of this Law, to request that a meeting of shareholders is convened in accordance with the provisions of Section 213 or 273 of this Law in order to examine the draft agreement on reorganisation and to take a decision on reorganisation.

(2) If the shareholders of the acquiring company who represent not less than one twentieth part from the equity capital of the company request that a meeting of shareholders is convened, the provisions of Section 354.¹ of this Law shall not be applied.

(2) The board of directors shall take a decision on reorganisation within a month after expiration of the time period indicated in Section 354.¹, Paragraph three, Clause 5 of this Law, if the shareholders of the acquiring company do not request convening of a meeting of shareholders for approval of an agreement on reorganisation.

(3) A decision on reorganisation may be taken prior to expiration of the time period indicated in Section 354.¹, Paragraph three, Clause 5 of this Law, if all shareholders of the acquiring company agree thereto.

(4) If as a result of reorganisation the acquiring company must increase the equity capital thereof in order to ensure the exchange coefficient of the capital shares (stocks) of the company and supplements (if any), the board of directors shall take a decision on amendments to the articles of association concurrently with a decision on reorganisation. If a joint stock company is involved in reorganisation, amendments to the articles of association thereof shall be made by the council.

(5) The board of directors of the acquiring company shall, within 15 days after taking of a decision on reorganisation, inform the shareholders of the company thereof.
Section 354.⁴ Decision of the Acquired Company on Reorganisation
(1) A decision on reorganisation shall be taken by the board of directors of the acquired company.

(2) The board of directors shall take a decision on reorganisation not less than within a month after information regarding a draft agreement on reorganisation has been notified in accordance with Section 338, Paragraph five of this Law.

(2) The amount of remuneration shall be equal to the amount, which the shareholder would obtain by dividing the property of the acquired company in case of liquidation that would take place at the time when a decision on reorganisation was taken.

(2) In the founding of the acquiring company, the provisions for the founding of the relevant type of company shall be observed, if in this Chapter it is not specified otherwise.

(3) If when a company is being divided, a new acquiring company is founded and no other existing company is involved in the reorganisation, the dividing company shall take a decision on division, which shall substitute for the agreement referred to in Section 338 of this Law. In addition to the information referred to in Section 338, Paragraph two of this Law, the decision on reorganisation shall indicate the firm name and legal address of the acquiring company and the dividing company’s division of property between the acquiring companies. The division of property document may be appended to the decision in the form of a separate document.

(4) In the case of divestiture, as shareholders of the newly founded company may become only those shareholders of the dividing company which have voted for the decision on reorganisation, as well as those who, up to the taking of the decision have expressed their intent in writing to become shareholders of the newly founded company.

(5) The board of directors of the dividing company shall convene a meeting within the time period specified in the decision of the shareholders of the newly founded company, which shall approve the articles of association of the newly founded company, elect the administrative institutions and perform other activities which are necessary in founding a company. The articles of association of the newly founded company shall be approved by not less than three-quarters of the number of votes present and the provisions of this Law which regulate the relevant type of company meeting of shareholders shall be applicable to such a meeting. The minutes of the meeting of shareholders shall indicate those shareholders which voted against the approval of the articles of association.

(6) Together with the application for reorganisation, the dividing company shall submit to the Commercial Register Office also an application for the entering of the acquiring company in the Commercial Register.

(7) The division shall come into effect from the time when the acquiring company is entered in the Commercial Register and a record is made regarding the dividing company.
Section 356. Division of Property not Provided for in the Reorganisation Agreement
(1) In the case of splitting up, the property, the division of which is not specified in the reorganisation agreement, shall be divided between the acquiring companies in proportion to the share of the property which they have acquired from the dividing company in accordance with the reorganisation agreement.

(2) The acquiring companies shall be solidarily liable for commitments of the dividing company, the division of which is not specified in the reorganisation agreement.

Chapter 3