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Some knowledge is required for limited company management in Latvia. Thanks to this knowledge, the management process can be carried out much more easily and smoothly. You can find the aforementioned knowledge and other details in the rest of our article.
There are 2 main factors in limited company management. They are members and committees and councils relating to management formed by the members. What are the principles of limited company management in Latvia? What details should you know in this process? All the details are in our article.[1]
Members
In the management of a limited company, the members and the management formed by the members are effective. In a limited company, those who own one or more shares and are in the shareholder register are called members. The member with the share gains important rights. Thanks to a share owned, the member gains the right to participate in the management of the company, profit distribution, and division of assets during the liquidation process of the company.
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Limited Company Management in Latvia
In Latvia, limited company management can also be expressed as institution management. Professional management is required for companies to be checked, directed, and operated. Limited company management in Latvia must be built on transparent, fair, responsible, and ethical values. These values will bring along a strong institution management understanding.
Board of Directors
It can be expressed as the institution that represents and manages a company. It is also the executive body of the company. The board of directors may consist of one or more members. In an LLC with reduced equity, all members of the board of directors are also members of the company. Members of the board of directors elect a president among themselves. The chairman of the board regulates the activities of this board.
The tenure of the board members in the board of directors of a limited company in Latvia is specified in the articles of association. If there is no article on this subject, that is, the tenure of the members of the board of directors are not fully specified in the articles of association, the members are elected indefinitely.
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Rights
Members of the board of directors have the rights specified in the articles of association. They may have individual or joint rights. It is extremely important to grant real representation rights to each board member.
For example, there shouldn’t be a situation where one of the two members has the right to individual representation and the other one has the right to joint representation. Because in such a case, the other member will not have real representation rights and will only have official representation rights instead.
Members of the board of directors cannot be members of the council, enterprise council, and audit unit within the company. This situation is very clear and there is flexibility.
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Council
The council can be expressed as a supervisory body in the company. It works as a supervisory body that tracks installation activities. Besides, the council is not mandatory for an LLC but can be created voluntarily.
The council may consist of 3 to 20 persons, depending on the articles of association. The members elect a president and a vice president among themselves. If there is no clause in the articles of association regarding the tenure, the members of the council are elected indefinitely.
A council member cannot be a member of the board of directors of the company. The member also cannot be a person acting with a commercial power of attorney, a prosecutor, and a board member or representative of a different company under the control of this company. Only persons who are not in the risk group of the State Revenue Administration [2] and who do not have any prohibition on their duties can be elected as a board or council member of these duties. These are the general principles about limited company management in Latvia.
Contact Us To Learn All Current Legislation About Setting Up a Limited Company In Latvia.
Igors Krumins continues his activities as a commercial and international lawyer within the body of “Jurmala Invest”. He has more than 10 years of experience, especially in the investment sector, and has provided consultancy services to numerous companies with his legal expertise. He successfully completed his undergraduate studies at Baltic International Academy and graduate studies at Latvijas Universitate. Apart from his native Latvian language, he can also speak Russian and English fluently.
