On 1 June 2023, amendments to the Commercial Law adopted by the parliament of Latvia on 1 May 2023 entered into force, as a result of which the reorganization process for commercial companies has significantly shortened, including for cross-border reorganizations.
The amendments have given a completely new wording to Part C “Reorganization of Commercial Companies” of the Commercial Law, but the overall principles of the reorganization process remain unchanged.
The most significant changes have been made to the procedure for filing creditors’ claims. Now, entries in the Commercial Register regarding the reorganization will be made no earlier than one month after the adoption of the decision on the reorganization by the members (shareholders, members) at the meeting, which LLCs and partnerships will be able to hold already two weeks after the draft reorganization agreement or the already signed agreement is announced on the website of the Register of Companies (the existing deadline for joint stock companies remains – one month from the announcement), creditors will have to submit their claims within the deadline (not less than one month) announced on the website of the UR after the entry of the reorganization in the Commercial Register.
Also important is the possibility for commercial companies to amend an agreement or draft agreement that has already been submitted to the Commercial Registry and announced, as provided for in Article 338(4) of the Commercial Law, as well as the shortening of the period for challenging a reorganization decision – now a reorganization decision can be challenged within one month from the date of adoption of the decision on reorganization (instead of 3 months previously). Two new types of cross-border reorganizations have also been introduced: cross-border division of companies and cross-border conversion.
Further information on the changes to the reorganization process from 1 June 2023 is available on the website of the Commercial Register.
©INNOVATOR 8.08.2023.
