''Akciju sabiedrība'' (Latvian pronunciation: �aktsiju ˈsabiɛdri:ba abbreviated a/s or AS, pronounced �aːˈes is a Latvian word for a legal form of a

corporation A corporation or body corporate is an individual or a group of people, such as an association or company, that has been authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law as ...

Latvia Latvia, officially the Republic of Latvia, is a country in the Baltic region of Northern Europe. It is one of the three Baltic states, along with Estonia to the north and Lithuania to the south. It borders Russia to the east and Belarus to t ...

. In English, the Latvian term ''akciju sabiedrība'' is translated as ''stock company'' by the Commercial Law of Latvia. In Latvia, stock companies (''akciju sabiedrība'' or ''AS'') are being registered by the Register of Enterprises of Latvia. ''Akciju sabiedrība'' (AS) is a company whose shares or stocks may be publicly traded. In English, the roughly equivalent terms are

Joint-stock company A joint-stock company (JSC) is a business entity in which shares of the company's stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares (certificates of ownership). Shareho ...

(JSC) and

Public limited company A public limited company (legally abbreviated to PLC or plc) is a type of public company under United Kingdom company law, some Commonwealth of Nations, Commonwealth jurisdictions, and Republic of Ireland, Ireland. It is a limited liability co ...

(PLC). ''Akciju sabiedrība'' is usually set up if intended to carry out a business requiring large investments. Since stock is a security, the raising of public capital by issuing new stock makes it easier to attract more investment than by offering shares to a closed range of applicants, as is the case with the limited liability company (LLC or ''SIA'' in Latvian). In addition, certain laws specifically require certain types of commercial activity to be conducted only by companies in the legal form of AS, such as banking, insurance, etc.

Meaning of the words

The Latvian term ''Akciju sabiedrība'' consists of two elements: ''akcijas'' for stocks and ''sabiedrība'' meaning 'company' or 'society'.

Legal form

The legal form ''Akciju sabiedrība'' is well known in the

Romano-Germanic law Civil law is a legal system rooted in the Roman Empire and was comprehensively codified and disseminated starting in the 19th century, most notably with France's Napoleonic Code (1804) and Germany's (1900). Unlike common law systems, which rel ...

legal system countries, for example, Lithuania, Estonia, Germany, Austria, Scandinavian countries. In Common-law legal systems, such as the United Kingdom and the United States, similar forms are

(PLC) and

Joint stock company A joint-stock company (JSC) is a business entity in which shares of the company's capital stock, stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their share (finance), shares (certifi ...

(JSC), respectively.

Founding

''Akciju sabiedrība'' must be registered with the Register of Enterprises of Latvia to start a business activity. On August 1, 2019, 1053 stock companies were registered in the Commercial Register. ''Akciju sabiedrība'' is a

legal person In law, a legal person is any person or legal entity that can do the things a human person is usually able to do in law – such as enter into contracts, lawsuit, sue and be sued, ownership, own property, and so on. The reason for the term "''le ...

. It shall have legal personality on the date on which it is entered in the Commercial Register.

Equity

The equity of a stock company is the contribution made by each stockholder to the company's stocks. Minimum equity is 35 000 EUR.

Types of ''Akciju sabiedrība''

There are two types of ''Akciju sabiedrība'' - private (''closed'' or ''slēgta'' in Latvian) and public (''open'' or ''atvērta'' in Latvian).

Private (closed) stock company

Private stock company (''slēgta akciju sabiedrība'') are not publicly available to other investors, so investing in such a company will have to be privately negotiated with existing stockholders.

Public (open) stock company

Public stock companies (''atvērta akciju sabiedrība'') are joint stock companies whose stocks are

financial instrument Financial instruments are monetary contracts between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership, interest in an entity or a contractual right to receive or deliver in the form ...

s and are publicly traded, for example on the

stock market A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include ''securities'' listed on a public stock exchange a ...

. Joint stock companies participate in the regulated stock market in order to raise additional capital for their development through the issue of securities, thus enabling anyone to invest in and become a stockholder in the company. When a joint stock company decides to trade its stocks on a regulated market, it is bound by the Financial Instruments Market law, which regulates the order in the regulated market. This law is overseen by the Financial and Capital Market Commission

Liability

The liability of ''Akciju sabiedrība'' is limited. ''Akciju sabiedrība'' shall be liable for its obligations with the whole of its property. The company shall not be liable for the obligations of its stockholders. Stockholders shall not be liable for the obligations of the company. ''Akciju sabiedrība'' may be founded as the company with supplemental liability, in which at least one of the stockholders is liable personally with the whole of their property for the obligations of the company.

Founders and shareholders (stockholders)

The founder of ''Akciju sabiedrība'' may be any natural or legal person. Minimum number of founders - 1. Stockholder registration (register keeping) is done by the Board of the company. Therefore, the Register of Stockholders of the company is not kept by the Register of Enterprises of Latvia and changes in the composition of the Register of Stockholders are not to be submitted to the Register of Enterprises.

Structure

''Akciju sabiedrība'' has a mandatory three-step management – the meeting of stockholders, supervisory board and management board.

The meeting of stockholders

The meeting of stockholders is the highest management body of the stock company, which has the right to decide on any issue. Only the meeting of stockholders is entitled to make decisions on the amendment of the articles of association, increase or decrease of the equity etc.

Supervisory board

The supervisory board is a body monitoring the activities of the management board and representing the interests of stockholders between the meetings. The supervisory board is a public oversight body that represents the interests of stockholders between meetings and oversees the activities of the management board. The supervisory board elects and dismisses the members of the management board, supervises the work of the management board, etc.

Management board

The management board is the executive body of ''Akciju sabiedrība'', which on a day-to-day basis manages and represents ''Akciju sabiedrība'', is responsible for its commercial activities, and manages assets and funds. The management board may be composed of one or more members. Public stock company has at least three members of the board.

Name of the company

The name of ''Akciju sabiedrība'' must include a reference to the legal form “''akciju sabiedrība''" or its abbreviation “AS”. The name must be clearly and distinctly different from the names already registered or applied for in the registers kept by the Register of Enterprises. The name should only contains the letters of the Latin or

Latvian alphabet The modern Latvian orthography is based on Latin script adapted to phonetic principles, following the pronunciation of the language. The standard alphabet consists of 33 letters – 22 unmodified Latin letters and 11 modified by diacritics. It ...

. The title may not contain the expression "Latvijas Republika” (Republic of Latvia) or its translation into a foreign language.

Similar forms

* Estonia – '' Aktsiaselts'' (AS) * Germany – ''

Aktiengesellschaft (; abbreviated AG ) is a German language, German word for a corporation limited by Share (finance), share ownership (i.e., one which is owned by its shareholders) whose shares may be traded on a stock market. The term is used in Germany, Austria ...

(AG)'' * Denmark – ''

Aktieselskab (; abbr.: A/S or a/s, ; ) is the Danish name for a stock-based corporation. An ''aktieselskab'' may be either publicly traded or private. Liability The shareholders of an ''aktieselskab'' are not liable for the debts of the company. If an ...

'' (A/S) * Norway – ''

Aksjeselskap is the Norwegian term for a stock-based company. It is usually abbreviated AS, historically often written as A/S. An AS is always a limited company, i.e. the owners cannot be held liable for any debt beyond the stock capital. Public compan ...

'' (AS) * Sweden – ''

Aktiebolag (, " stock company") is the Swedish term for "limited company" or "corporation". When used in company names, it is abbreviated as "AB" (in Sweden), "Ab" (in Finland), or, rarely, "A/B" (dated), roughly equivalent to the abbreviations ''Corp.'', ...

'' (AB) * Finland – ''

Osakeyhtiö (; " stock company"), often abbreviated to Oy (), is the term for a Finnish limited company (e.g., Ltd, LLC, or GmbH). The Swedish-language term is , often abbreviated (in Finland) to Ab. The Swedish abbreviation is sometimes included, as ...

'' (Oy)

References

{{Reflist Business in Latvia