Glossary

Insolvency (maksātnespēja)

In Latvian: Maksātnespēja

Companies Updated

Insolvency (maksātnespēja) is the state of a debtor that cannot meet its obligations. Latvian insolvency proceedings for a legal person are a set of legal measures in which creditors' claims are satisfied from the debtor's assets, and they begin on the day a court declares them.

One sign of insolvency for a legal person: an SIA or AS has not paid debts with a principal of more than EUR 4,268 that have fallen due, the creditor has sent a warning to its legal address that it intends to file for insolvency, and within three weeks the debt is neither paid nor reasonably disputed. Other signs include failing to pay wages within two months, or debts left unpaid for more than two months.

A company in financial difficulty that can still be saved may use legal protection proceedings, whose aim is to restore its ability to meet its obligations. Insolvency proceedings are recorded in the insolvency register kept by the Enterprise Register.

Insolvency is not liquidation. In liquidation a company with enough assets pays its debts and closes; if the assets turn out to be insufficient, the liquidator must file for insolvency.

Example

SIA "Ozols" has not paid a supplier EUR 6,000 on an overdue invoice. The supplier sends a warning to the company's legal address. If the debt is neither paid nor reasonably disputed within three weeks, the supplier can apply to the court for insolvency proceedings.

How Fakts handles it

The Fakts mirror of the Enterprise Register, refreshed every night from data.gov.lv, also holds insolvency records.

Legal basis

This explanation is for information and does not replace tax or legal advice. The law in its current consolidated text prevails.