On Thursday, 30 May, the Saeima adopted in the second and final reading urgent amendments to the Commercial Law, according to which in cases where the joint stock company does not have all the current data on the shareholder, it will be allowed to submit an incompletely completed first-time shareholder register to the Register of Enterprises.

Currently, the law obliges joint stock companies to submit the register of shareholders or information on the central securities depository to the Register of Enterprises by 30 June. If a joint stock company fails to submit the relevant information and documents within the specified time period, its activities may be terminated.

The current regulation also stipulates that the full name, personal identity number (if a person does not have a personal identity number, then the date of birth) and address of the shareholder must be indicated in the register of shareholders. If any of the information referred to in the Law is not indicated, the register of shareholders shall be deemed to be incomplete, and the Register of Enterprises shall refuse to accept such document. The authors of the draft law from the Economic, Agricultural, Environmental and Regional Policy Committee indicate that in some cases, due to reasons beyond the control of the joint stock company, it does not have all the current information about the shareholder, for example, the address is missing or the shareholder's personal identity number is not available.

To date, only 25 per cent of joint stock companies subject to this requirement have submitted shareholder registers, representatives of the Ministry of Justice previously indicated to MPs.

The deadline for submission of the register of shareholders or information on the central securities depository has been extended until 30 September of this year. The amendments also provide for the possibility for joint stock companies to submit the shareholder register with incomplete data. Until all the information identifying the shareholder (full name, personal identity number or, if the person does not have a personal identity number, the date of birth) is entered in the register, the shareholder does not have the right to alienate the shares or encumber them with rights in rem, does not have voting rights, as well as the votes of this shareholder will not be taken into account when determining the representation threshold. Similarly, the joint stock company will not pay dividends to the shareholder concerned.

If by 31 December of this year none of the identifying information of shareholders has been entered in the register of shareholders, the joint stock company shall submit an application to the court regarding the summoning procedure and extinguishing of ownership rights to shares as of January of the following year. Shares redeemed in accordance with the summoning procedure will be transferred to the joint stock company.

The amendments will enter into force the day after the promulgation.

Saeima Press Service