Company Liquidation in Latvia: A Complete Practical Guide

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Company liquidation in Latvia is a clear, structured and formal process. It requires accuracy, correct documents and strict attention to deadlines.
Business owners close companies for different reasons. No activity. New projects. Relocation to another country. Financial difficulties. Or the company is simply no longer needed.

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In this guide, you will get a full explanation of how liquidation works, what documents you need, how long the process lasts, what the liquidator does, what creditors can demand and what mistakes usually cause delays.

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What Company Liquidation Means in Latvia

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Liquidation means the complete termination of a legal entity.
The company stops operations. It does not sign contracts. It does not take on new obligations. It does not hire staff and does not issue invoices.

The goal is simple:
• close all debts
• settle tax obligations
• terminate contracts
• handle all assets
• prepare final financial reports

After completion, the company is removed from the Register of Enterprises.
From that moment, it no longer exists legally.

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When You Should Liquidate a Company

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No Business Activity

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If the company is inactive and has no turnover, liquidation is the best solution. Inactive companies must still submit reports. This costs time and money.

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Change of Business Direction

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You may start a new project, move operations abroad or change the structure. The old company becomes unnecessary.

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Financial Problems

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If the company cannot meet obligations, liquidation is safer than ignoring debts.

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Strategic Decision

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Sometimes the owner simply decides to close the company for personal or business reasons.

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Which Company Types Can Be Liquidated

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SIA (Limited Liability Company)

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The most common type. The liquidation process is fully regulated by law.

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IK (Individual Merchant)

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Easier to close because it is not a separate legal entity.

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Self-Employed

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The process is fast. It only requires a formal request to the tax authority.

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AS and Other Types

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Possible to liquidate, but the process is more complex.

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Stages of Company Liquidation in Latvia

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Liquidation consists of several mandatory steps.
You must follow each of them.
Let’s review the full process.

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1. Decision to Liquidate

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Owners make an official decision.
The document includes:

• date of the decision
• company details
• appointment of the liquidator
• description of the next steps

The liquidator replaces the board and takes full control during the liquidation period.

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2. Submission to the Register of Enterprises

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The following documents are submitted:

• decision on liquidation
• liquidator’s written consent
• application form
• state fee payment confirmation

The Register publishes an official notice.

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3. Notice to Creditors

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Creditors receive a formal deadline.
Usually 3 months.
Before the deadline expires, the company cannot distribute money or assets to owners.

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4. Settlement of Obligations

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The liquidator must review all obligations:

• taxes
• supplier invoices
• employee payments
• loan agreements
• leases
• contracts
• overdue debts

All obligations must be settled before preparing the final statement.

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5. Liquidation Balance and Final Reports

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The liquidator prepares:

• liquidation balance
• profit and loss statement
• description of assets and liabilities
• confirmation documents for the tax authority

The State Revenue Service reviews and approves the reports.

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6. Final Submission and Removal From the Register

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After approval, the liquidator submits the final documents.
The Register removes the company from the database.
From this moment, the company no longer exists legally.

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Who the Liquidator Is and What They Do

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The liquidator is the central figure in the entire process.
Their responsibilities include:

• checking all documents
• settling debts
• communicating with creditors
• answering questions from the tax authority
• preparing reports
• presenting the company until removal from the register

The liquidator may be the owner, an accountant or a legal professional.

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Rights and Actions of Creditors

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Creditors have the right to:

• request information
• submit claims within the published deadline
• receive payments if claims are valid

If a creditor misses the deadline, the liquidator may reject the claim.

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VAT Status During Liquidation

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VAT registration does not end automatically.
Until liquidation is complete, the company must:

• submit monthly VAT reports
• maintain proper accounting
• comply with all tax rules

VAT is cancelled only after the company is removed from the register.

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How Long Liquidation Takes in Latvia

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Typical timelines:

• 4–8 months for SIA
• 1–2 months for self-employed
• up to 12 months if the company has debts or problems in accounting

The timeline depends on documentation, outstanding obligations and creditor activity.

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Common Liquidation Mistakes

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Missing Documents

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The Register rejects incomplete submissions.

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Unsettled Tax Obligations

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The tax authority blocks liquidation.

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Incorrect or missing creditor notifications

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This extends the creditor deadline and delays the process.

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Errors in the liquidation balance

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This causes repeated submissions.

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Why You Should Not Delay Liquidation

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• No need to submit monthly reports
• No risk of tax penalties
• No accounting expenses
• No surprise checks
• No growing obligations

Сlosing the company in time protects the owner from unnecessary costs.

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‍How to Prepare for Company Liquidation

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Preparation affects the entire process.
The better the preparation, the faster the liquidation moves.
Before filing documents, the liquidator checks every detail.

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Review of Accounting Records

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The accounting must be correct. The liquidator reviews:
• monthly reports
• VAT records
• salary data
• balances
• bank statements
• classification of operations
• supporting documents

If something is missing, the liquidator corrects it before submitting forms to the Register of Enterprises and the tax authority.

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Review of Contracts

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The liquidator checks all contracts:
• active
• expired
• pending
• long-term

Contracts that create obligations must be closed.
If a contract is still active, the liquidator prepares a termination or a final act.

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Review of Assets

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The liquidator reviews all assets:
• computers
• vehicles
• office items
• equipment
• inventory
• tools

Assets must be sold, written off or transferred by law.
This step is mandatory before preparing the liquidation balance.

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How the Liquidator Works in Practice

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The liquidator becomes the temporary manager of the company.
They take full responsibility for documents, obligations and reports.

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1. Takes Control of the Company

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The liquidator replaces the board.
They sign all documents and represent the company.

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2. Reviews All Data

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The liquidator checks:
• accounting data
• balances
• tax declarations
• open liabilities
• records of previous years
• correspondence with creditors

The goal is simple: identify everything that may delay the liquidation.

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3. Settles Obligations

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The liquidator works with:
• creditors
• suppliers
• the State Revenue Service
• banks
• employees
• partners

Everything must be resolved before the final stage.

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4. Follows Deadlines

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The liquidator respects the creditor deadline.
This is a strict legal requirement.

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5. Prepares the Liquidation Balance

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This is the final financial document.
It shows all assets and all liabilities at the moment of closure.

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How Creditors Are Notified

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The Register of Enterprises publishes an official notice.
From this moment, creditors have time to submit claims.

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Why the Creditor Deadline Is Important

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It protects both sides:
• creditors get their chance to claim
• the company gets a clear timeline
• the liquidator avoids new claims after closure

The deadline is usually three months.

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If There Are Many Creditors

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The liquidator checks each claim separately.
Valid claims must be paid.
Invalid claims can be rejected.

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What Happens If the Company Has No Money to Pay Debts

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This situation is common for inactive companies.
There are several options.

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1. Sell Assets

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If the company owns equipment, tools or inventory, these items can be sold to cover debts.

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2. Collect Debts From Clients

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If the company has unpaid invoices from clients, the liquidator must collect them.

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3. Negotiate With Creditors

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Some creditors accept partial repayment.
Sometimes they agree to close the claim with a reduced amount.

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4. Report Insufficient Assets

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If there is no money and no assets, the liquidator informs the Register.
This may lead to a separate insolvency process.

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Liquidation Accounting Explained

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Liquidation accounting differs from regular accounting.
The goal is to fix all remaining numbers and close all accounts.

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Fixing Balances

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The accountant records:
• cash
• remaining assets
• debts
• creditors
• debtors
• active contracts

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Closing Accounts

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The accountant closes all:
• expense accounts
• income accounts
• temporary accounts
• balance accounts

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Liquidation Balance

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This is the main document.
It shows the final structure of the company before removal from the register.

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Liquidation of a Company With Activity

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Liquidation becomes more complex if the company had turnover.

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More Documents

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The liquidator must review:
• every period
• every VAT report
• every salary report
• bank reconciliation
• inventory data

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Possible Checks From the Tax Authority

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The State Revenue Service may review operations.
This happens more often when the company had:
• high turnover
• cross-border transactions
• irregular reports

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Corrections

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If errors appear, the accountant prepares corrections.
This step is important to avoid fines.

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Liquidation of a Company Without Activity

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This is the simplest case.

The company had:
• no contracts
• no employees
• no turnover
• no VAT movements

The process is faster.
Few documents are required.
The risk of tax questions is minimal.

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Working With Banks During Liquidation

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Closing Bank Accounts

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Bank accounts must be closed at the final stage.
The liquidator requests closing forms and clears remaining balances.

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Blocked Operations

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Banks do not allow new business activity.
Only payments related to liquidation are permitted.

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Bank Confirmation

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Sometimes the Register or the tax authority asks for:
• balance confirmation
• transaction summaries
• account closing letters

The liquidator provides these documents.

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Can a Company Operate During Liquidation?

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No.
The company cannot:
• issue invoices
• sign new contracts
• hire employees
• buy goods
• enter into obligations

Any business activity during liquidation is illegal.

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How Liquidation Ends

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Liquidation ends when the liquidator submits:
• liquidation balance
• confirmation of paid obligations
• proof of creditor notifications
• request to remove the company

The Register checks the documents and removes the company from the list.

From that moment, the company no longer exists.

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Company liquidation in Latvia is clear and predictable when done correctly.
The process requires discipline, structured documents and accurate steps.
A professional approach prevents delays, tax issues and unnecessary stress.
Liquidation allows the owner to close all obligations safely and move to new projects without risks.

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Frequently Asked Questions

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1. Do I need accounting during liquidation?
Yes. Accounting support is required until the company is removed from the register.

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2. Can the liquidator be the owner?
Yes. The owner can act as the liquidator.

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3. Can a company with debts complete liquidation?
Yes, but the procedure is more complex.

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4. Do reports continue during liquidation?
Yes. Reports must be submitted until the company is officially removed.

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5. What happens with remaining money after liquidation?
After the creditor deadline, remaining funds are distributed to the owners.