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

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

21 December 2000 [shall come into force from 30 December 2000];

29 March 2001 [shall come into force from 31 March 2001];

26 June 2001 [shall come into force from 30 June 2000];

14 February 2002 [shall come into force from 15 March 2002];

22 April 2004 [shall come into force from 21 May 2004];

16 June 2005 [shall come into force from 20 July 2005];

16 March 2006 [shall come into force from 10 April 2006];

24 April 2008 [shall come into force from 28 May 2008];

18 December 2008 [shall come into force from 21 January 2008];

15 April 2010 [shall come into force from 1 May 2010];

16 June 2011 [shall come into force from 1 July 2011];

8 July 2011 [shall come into force from 13 July 2011];

14 June 2012 [shall come into force from 10 July 2012];

29 November 2012 [shall come into force from 1 January 2012];

2 May 2013 [shall come into force from 1 July 2013];

6 June 2013 [shall come into force from 1 July 2013];

19 September 2013 [shall come into force from 18 October 2013];

6 November 2013 [shall come into force from 1 January 2014];

16 January 2014 [shall come into force from 17 February 2014].

If a whole or part of a section has been amended, the date of the amending law appears in square brackets at the end of the section. If a whole section, paragraph or clause has been deleted, the date of the deletion appears in square brackets beside the deleted section, paragraph or clause.

The Saeima¹ has adopted and the

President has proclaimed the following Law:

The Commercial Law

Part A

Section 1. Merchants and Commercial Activities

(1) A merchant is a natural person (individual merchant) or a commercial company (partnership and capital company) registered with the Commercial Register.

(2) Commercial activity is an open economic activity, which is performed by merchants in their name for the purposes of gaining a profit. Commercial activity is one of the types of entrepreneurial activity.

(3) Economic activities are any systematic, independent activities for remuneration.

(4) In this Law it may be specified that particular types of economic activities may only be performed by a merchant. The status of a merchant may be granted by law also to other persons.

[14 February 2002]
Section 2. Legal Effect of Registration
If a merchant is registered in the Commercial Register, an objection that the economic activities, which are performed utilising the firm name registered in the Commercial Register are not commercial activities shall not be allowed.

Section 3. Legal Regulation of Commercial Activities

(1) Commercial activities shall be regulated by this Law, by The Civil Law and other laws, as well as by the norms of international law that are binding on Latvia.

(2) The provisions of The Civil Law shall apply to commercial activities only insofar as this Law or other laws that regulate commercial activities do not specify otherwise.

(3) The provisions of this Law shall apply to persons who are not merchants, or to economic activities that are not commercial activities if this Law or another law especially provides for it.

(4) The provisions of this Law shall not apply to agricultural production and other trade activities, which are performed by a natural person and are regulated by other laws, if the person who performs them has not been registered in the Commercial Register as an individual merchant.

[14 February 2002]
Section 4. Restrictions on Commercial Activities
(1) Restrictions on commercial activities may only be specified by law or on the basis of law.

(2) Merchants have the right to freely choose types of commercial activities that are not prohibited by law.

(3) In this Law, separate types of commercial activities may be specified, for the performance of which a permit (licence) is necessary, or also that may be performed by merchants in conformity with the requirements specified by this Law.

(4) Restrictions on commercial activities for a natural person may be determined by:

1) an adjudication rendered within the scope of criminal proceedings, by which the person is suspended the right to perform commercial activities of all types or specific type;

2) an adjudication rendered within the scope of criminal proceedings or administrative violation, by which the person is suspended the right to hold certain offices.

1) to apply himself or herself for entering in the Commercial Register as an individual merchant and to perform commercial activities as an individual merchant;

2) to be the founder of a commercial company;

3) to become a member, shareholder, stockholder of a commercial company, except the case when shares, stocks or investment (capital) of the equity capital are inherited;

4) to be the secretary of a partnership or a member of a partnership with the right of representation;

5) to be a member of the board of directors or council of a capital company;

6) to participate in taking of a decision of the meeting of shareholders in the case specified in Section 210, Paragraph two of this Law;

7) to be a proctor, a person with a commercial power of attorney or a person who is authorised to represent a foreign merchant in activities related to a branch;

8) to be the liquidator of a commercial company;

9) to give instructions or advices to an individual merchant, member, shareholder or stockholder of a commercial company, a member of the board of directors or council, a proctor or a person with a commercial power of attorney, or otherwise influence them.

(2) The prohibitions specified in Paragraph one of this Section shall be applicable to a natural person who has been suspended the right to perform commercial activities of specific type only in relation to the type of commercial activity specified in the relevant adjudication. If the legal status of such person allows taking of decisions in a commercial company, he or she is prohibited to take decisions in issues, which are related to the type of commercial activity specified in the relevant adjudication.

(3) An individual merchant who has been suspended the right to perform commercial activities of all types or specific type has a duty to suspend his or her activity for the period of prohibition specified in the relevant adjudication to the relevant extent or to terminate his or her status of individual merchant, with or without alienating the undertaking.

(4) The sole member of a limited liability company who has been suspended the right to perform commercial activities of all types or specific type has a duty to suspend the activity of the company for the period of prohibition specified in the relevant adjudication to the relevant extent, to terminate the activity of the company or to alienate the equity capital shares.

(5) If a natural person has been suspended the right to perform commercial activities of all types or specific type, he or she has a duty to inform the merchant thereof without delay after entering into effect of the relevant adjudication, but if the merchant is a commercial company – also members, shareholders or stockholders thereof.

(6) Application of this Section is without prejudice to the provisions of Section 5 of this Law.

[29 November 2012; 2 May 2013]
Section 4.² Restrictions on Holding Offices Specified for a Natural Person
(1) If a natural person, on the basis of an adjudication rendered within the scope of criminal proceedings or administrative violation, has been suspended the right to hold certain offices in a commercial company and in administrative bodies thereof, the relevant natural person is not entitled to be:

1) the secretary of a partnership;

2) a member entitled to represent a partnership;

3) a member of the board of directors of a capital company;

4) a member of the council of a capital company;

5) a proctor;

6) a person with a commercial power of attorney;

7) a person who is authorised to represent a foreign merchant in activities related to a branch;

8) a liquidator of a commercial company;

9) a company controller;

10) an auditor.

(1¹) If a court, on the basis of an adjudication rendered within the scope of civil proceedings, has restricted legal capacity of a natural person of legal age (due to disorders of mental nature or other health disorders or due to dissolute or wasteful life of a person), the relevant natural person shall not be entitled to hold the offices referred to in Paragraph one, Clauses 3-10 of this Section.

(2) If a natural person has been suspended the right to hold certain offices or if a court has restricted legal capacity for him or her, such person has a duty to inform the merchant thereof without delay after entering into effect of the relevant adjudication, but if the merchant is a commercial company – also members, shareholders or stockholders of the relevant commercial company. If legal capacity has been restricted and trusteeship has been established for a natural person, the duty of informing shall rely on his or her trustee who provides information without delay as soon as he or she has get to know it or he or she should have to get to know it, that the relevant person holds a certain office.

(3) Application of this Section is without prejudice to the provisions of Section 5 of this Law.