Task №1.
One person or a group of investors can establish a company in Latvia in the form
of a Joint Stock Company. The number of shareholders is not limited. The
founders of the Joint Stock Company can be both residents of the country and
non-residents.
The paid statutory fund of a Latvian joint stock company must be at least 35,000
euros. A joint stock company registered in Latvia is liable to creditors with all its
property, but shareholders risk only the cost of their paid up shares.
Initially, the amount before registration must be made in a mandatory form in
money. In the future, the authorized capital of the Joint Stock Company can be
increased both by money and property. When submitting an application for
opening a Joint Stock Company in Latvia, it is necessary to deposit at least 25% of
the authorized capital, with at least LVL 25,000. The rest must be paid during the
first year of the Joint Stock Company functioning.
Tasks №2.
1. The fixed capital (authorized capital) of a company can be increased:
• by attracting new participants who invest their shares;
• by increasing the value of the invested shares;
• by investing additional shares by the participants;
• by investing additional shares by the participants.
When increasing the equity capital in the manner provided for by this Article, the
increase in equity capital must not exceed the equity capital of the company by
more than five times.
2. If the fixed capital of a company is increased by reimbursing the debts of the
company with shares of its capital, the fixed capital shall include those debts that
the company has chosen and for the compensation of which the elected
credetors have agreed in writing.
3. In order to increase the equity capital (authorized capital), amendments must
be made to the charter of the company. The main capital can be increased only by
the decision of the meeting of participants.
Tasks №3.
Reserves cannot be used to pay dividends.
Dividends may not be accrued and paid if, when approving the annual balance
sheet, it is stated that the equity capital of the Joint Stock Company is less than
the paid-in share capital.
Dividends are recalculated once a year, paid only in cash on the basis of a profit
sharing decision.
Tasks №4.
Methods for reducing equity capital:
• by the acquisition of its own shares by the Joint Stock Company itself and
their redemption;
• by canceling shares acquired by shareholders;
• by reducing the par value of the shares.
Tasks №5.
