A Victory for the Shareholder Autonomy: The Latvian Enterprise register changes its practice following our client’s case – and issues a formal apology
Through principled legal argumentation and consistent advocacy for our client’s rights, the CORVUS Vanags Legal team has achieved a significant shift in public administration practice: the Latvian Enterprise register (ER) will no longer assess the substance of share class rights in LLC (SIA) articles of association, provided they do not clearly conflict with mandatory legal norms.
🧠 This matter was developed and argued by our team members – sworn attorney-at-law Andrejs Voroncovs, assistant to attorney-at-law Agnese Gudele-Krongorne and the associate lawyer Jūlija Aleksejeva, whose combined efforts were instrumental in securing this outcome.
❗ The case that triggered this change:
The ER had refused to register a provision in the articles of association concerning the redemption of employee shares at nominal value, relying on an unjustified analogy with Article 255 of the Latvian Commercial Law – a rule that applies exclusively to personnel shares in joint-stock companies.
📍 Our Legal Position:
✔️ The Commercial Law contains no specific regulation on the transferability or buy-back of personnel shares in LLCs, meaning the matter has been deliberately left to the discretion of the shareholders.
✔️ Applying legal analogy in such a case is not only incorrect but also unlawful when it restricts property rights protected under Article 105 of the Latvian Constitution;
✔️The contractual mechanism to redeem employee shares at nominal value is not prohibited by law and is fully aligned with the principle of shareholder autonomy;
✔️ Legal theory clearly recognises that exceptions in law may not be extended by analogy, as this distorts the internal coherence of the legal system.
📣 Outcome:
✅ The unlawful administrative act was revoked;
✅ The client’s articles were fully registered;
✅ The Company Register revised its long-standing practice, officially acknowledging the error and adopting a new interpretive approach.
📅 Importantly, on 21 July 2025, the ER issued a formal apology, recognising that its prior reliance on legal interpretation through analogy was legally unfounded and had resulted in unjustified delays, costs, and the need for litigation.
🔗 Official statement by the Enterprise register (26 June 2025) available here.
💡 This case illustrates that precise, constitutionally sound legal reasoning can not only reverse unlawful administrative acts but also reshape institutional practice, strengthening entrepreneurs’ ability to design capital structures freely within the framework of private law.
🎯 Legal protection is not just a formality – it is a systemic responsibility.