Company & Commercial - Latvia

On December 18 2008 the Saeima (Parliament) adopted the draft amendments to the Commercial Law at their third reading.

The amendments, which take effect on January 1 2010, supplement the Commercial Law with a chapter entitled "Commercial Transactions". The chapter contains general provisions on commercial transactions, as well as special provisions on specific types of commercial transaction (ie, commercial purchase, commission, forwarding, storage, leasing, factoring and franchising agreements).

The purpose of these amendments is to supplement the legal system with provisions regulating commercial transactions. The absence of regulation for commercial transactions was considered one of the most significant drawbacks of the law. Hitherto, upon closing transactions within commercial circulation, the provisions of the Civil Law on legal transactions applied. However, these have not always ensured simplicity, stability and speed in closing and performing commercial transactions. Therefore, the introduction of the new provisions is desirable and has been long awaited.

Once these amendments come into effect, the provisions of the Civil Law will apply to respective commercial relationships only insofar as they would not be restricted by the special legal regulations included in the amendments to the Commercial Law.