Saeima conceptually supports amendments to the Commercial Law which will restrict illegal takeovers of businesses


On Thursday, 5 July, the Saeima in the first reading gave conceptual support for the Draft Law on the Amendments to the Commercial Law, which stipulates that in case of changes in a capital company’s composition, a notarised signature will be necessary. The amendments set out specific cases when signatures will need to be certified by a sworn or notary public or when documents will need to be signed with a secure electronic signature.  
The Draft Law stipulates that signatures in a capital company’s application will need to be notarised when submitting to the Enterprise Register (ER) significant changes, for example, in the composition of the company’s council, board of directors or liquidator.

In order to protect the rights and legal interests of persons, the Draft Law provides that it will be mandatory to notarise signatures when, for example, submitting to the ER changes in the composition of the members or officials of a company. Signatures may also be certified by a notary public at the ER, and applications may be signed with a secure electronic signature.

The amendments also change the procedure by which minutes of a capital company’s member or shareholder meetings are signed and formatted. 

The Draft Law calls for changes in the procedure by which a company’s members are registered by clearly indicating how data will be entered in the member register. Furthermore, the amendments stipulate that the board of directors will have to submit to the ER changes in the member register within three days, instead of the previously set 14.

The amendments contain several optional norms; for example, a person may choose to stipulate in the statutes of a capital company specific legal actions in which a notary public must be involved.  
As before, the Law still requires a person’s signature on the application to enter a merchant in the Commercial Register to be notarised.  

The authors of the Draft Law point out that changing the composition of a company is one of the most widely used methods of illegally taking over a capital company. The amendments will reinforce protection of a capital company’s members, shareholders and potential buyers. 

The amendments to the Commercial Law are still to be reviewed by the Saeima in the second and third reading.


Saeima Press Service

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